[Joint House and Senate Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE MAGNITSKY ACT AT FIVE YEARS:
ASSESSING ACCOMPLISHMENTS AND CHALLENGES
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HEARING
BEFORE THE
COMMISSION ON SECURITY AND COOPERATION IN EUROPE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 14, 2017
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COMMISSION ON SECURITY AND COOPERATION IN EUROPE
LEGISLATIVE BRANCH COMMISSIONERS
HOUSE SENATE
CHRISTOPHER H. SMITH, New Jersey ROGER WICKER, Mississippi,
Co-Chairman Chairman
ALCEE L. HASTINGS, Florida BENJAMIN L. CARDIN. Maryland
ROBERT B. ADERHOLT, Alabama JOHN BOOZMAN, Arkansas
MICHAEL C. BURGESS, Texas CORY GARDNER, Colorado
STEVE COHEN, Tennessee MARCO RUBIO, Florida
RICHARD HUDSON, North Carolina JEANNE SHAHEEN, New Hampshire
RANDY HULTGREN, Illinois THOM TILLIS, North Carolina
SHEILA JACKSON LEE, Texas TOM UDALL, New Mexico
GWEN MOORE, Wisconsin SHELDON WHITEHOUSE, Rhode Island
EXECUTIVE BRANCH COMMISSIONERS
Vacant, Department of State
Vacant, Department of Commerce
Vacant, Department of Defense
[ii]
THE MAGNITSKY ACT AT FIVE YEARS:
ASSESSING ACCOMPLISHMENTS AND CHALLENGES
----------
December 14, 2017
COMMISSIONERS
Page
Hon. Roger Wicker, Chairman, Commission on Security and
Cooperation in Europe.......................................... 1
Hon. Benjamin Cardin, Ranking Member, Commission on Security and
Cooperation in Europe.......................................... 2
Hon. Christopher Smith, Co-Chairman, Commission on Security and
Cooperation in Europe.......................................... 4
Hon. Steven Cohen, Commissioner, Commission on Security and
Cooperation in Europe.......................................... 18
Hon. Gwen Moore, Commissioner, Commission on Security and
Cooperation in Europe.......................................... 21
Hon. Sheldon Whitehouse, Commissioner, Commission on Security and
Cooperation in Europe.......................................... 23
Hon. Cory Gardner, Commissioner, Commission on Security and
Cooperation in Europe
Hon. Sheila Jackson Lee, Commissioner, Commission on Security and
Cooperation in Europe
Hon. Jeanne Shaheen, Commissioner, Commission on Security and
Cooperation in Europe
COMMISSION STAFF
Ambassador David T. Killion, Chief of Staff, Commission on
Security and Cooperation in Europe............................. 1
WITNESSES
William Browder, CEO, Hermitage Capital Management............... 7
Garry Kasparov, Chairman, Human Rights Foundation................ 9
Irwin Cotler, PC, OC, Chair, Raoul Wallenberg Center for Human
Rights......................................................... 12
APPENDICES
Prepared statement of Hon. Roger Wicker.......................... 33
Prepared statement of Hon. Christopher Smith..................... 36
Prepared statement of William Browder............................ 37
Prepared statement of Garry Kasparov............................. 42
Prepared statement of Irwin Cotler............................... 45
Material for the Record.......................................... 49
THE MAGNITSKY ACT AT FIVE YEARS:
ASSESSING ACCOMPLISHMENTS
AND CHALLENGES
----------
December 14, 2017
Commission on Security and Cooperation in Europe
Washington, DC
The hearing was held at 9:36 a.m. in Room 562, Dirksen
Senate Office Building, Washington, DC, Hon. Roger Wicker,
Chairman, Commission on Security and Cooperation in Europe,
presiding.
Commissioners present: Hon. Roger Wicker, Chairman,
Commission on Security and Cooperation in Europe; Hon. Benjamin
Cardin, Ranking Member, Commission on Security and Cooperation
in Europe; Hon. Christopher Smith, Co-Chairman, Commission on
Security and Cooperation in Europe; Hon. Steven Cohen,
Commissioner, Commission on Security and Cooperation in Europe;
Hon. Gwen Moore, Commissioner, Commission on Security and
Cooperation in Europe; Hon. Sheldon Whitehouse, Commissioner,
Commission on Security and Cooperation in Europe; Hon. Cory
Gardner, Commissioner, Commission on Security and Cooperation
in Europe; Hon. Sheila Jackson Lee, Commissioner, Commission on
Security and Cooperation in Europe; and Hon. Jeanne Shaheen,
Commissioner, Commission on Security and Cooperation in Europe.
Commission staff present: Ambassador David T. Killion,
Chief of Staff, Commission on Security and Cooperation in
Europe.
Witnesses present: William Browder, CEO, Hermitage Capital
Management; Garry Kasparov, Chairman, Human Rights Foundation;
and Irwin Cotler, PC, OC, Chair, Raoul Wallenberg Center for
Human Rights.
HON. ROGER WICKER, CHAIRMAN, COMMISSION ON SECURITY AND
COOPERATION IN EUROPE
Mr. Wicker. [Sounds gavel.] The hearing of the Commission
will come to order, and good morning to all of you. Welcome to
today's hearing on ``The Magnitsky Act at Five Years: Assessing
Accomplishments and Challenges.''
Before we begin today, I want to recognize Ambassador David
Killion.
AMBASSADOR DAVID T. KILLION, CHIEF OF STAFF, COMMISSION ON
SECURITY AND COOPERATION IN EUROPE
Amb. Killion. Right here, Senator.
Mr. Wicker. Just stand for a moment. Thank you. Thank you,
David--the Helsinki Commission Chief of Staff who is retiring
at the end of this month after 23 years of federal service.
Senator Cardin and I joined together to appoint Ambassador
Killion to direct the Commission at a key moment, shortly after
Russia's invasion of Crimea in 2014. So let's give Ambassador
Killion a round of applause. [Applause.]
Ambassador Killion's leadership has contributed greatly to
enhancing the stature and impact of our Commission as it
develops U.S. policy responses to critical security threats in
the OSCE region. With his considerable diplomatic skills, he
has also managed to keep our Commission unified, enabling us to
speak with a strong voice when necessary on issues such as
Russia's violation of its Helsinki commitments. In addition,
Ambassador Killion has extended Commission leadership to new
and critically relevant policy areas such as the effort to
combat kleptocracy. As such, this hearing is a perfect capstone
to Ambassador Killion's work for us.
Ambassador, thank you for your public service.
This is the Commission's final hearing of 2017.
HON. BENJAMIN CARDIN, RANKING MEMBER, COMMISSION ON SECURITY
AND COOPERATION IN EUROPE
Mr. Cardin. Mr. Chairman, on Ambassador Killion--if I
could, just for one moment--I really want to join you in
thanking Ambassador Killion for his service to the Helsinki
Commission and to our country. He had a distinguished career as
an ambassador to UNESCO and brought that talent to the Helsinki
Commission. What we really love about this Commission and its
work, it's never been partisan. It's been professional. And Mr.
Killion has continued that legacy during extremely difficult,
turbulent times.
I want to thank him for his service to our country, thank
him for his service to this Commission, and wish him well.
Amb. Killion. Thank you.
Mr. Wicker. Thank you, Senator Cardin. And I'm sure you
have expressed the feelings of us all.
The Magnitsky Act was authored by Senator McCain, Senator
Cardin, and me to hold accountable the Russians who were
responsible for the torture and murder of tax attorney Sergei
Magnitsky in 2012. Why was the Helsinki Commission concerned
about this particular crime? The mandate of the Helsinki
Commission requires us to monitor the acts of the signatories
which reflect compliance with or violation of the articles of
the Final Act of the Conference on Security and Cooperation in
Europe, also known as the Helsinki Final Act. Those articles
deal with commitments in three major areas, or baskets:
security, economics, and the human dimension. The case that
ended with Sergei Magnitsky's tragic death concerned major
violations in two of these three baskets: massive corruption in
Russia, which the OSCE attempts to deal with through economic
measures, and the egregious human rights violations involved in
the unspeakable treatment of Sergei Magnitsky.
The five years that have elapsed since the passage of the
Magnitsky Act and the eight years that have elapsed since Mr.
Magnitsky's murder have certainly shown that our concern with
Russia's unchecked corruption and wanton disregard for human
rights was well founded. In that time corruption has continued
to eat away at the fabric of Russian society, enabling further
misbehavior both within and beyond Russia's borders. The state
at this point can truly be described as a kleptocracy, where
Putin rules with the help of a group of cronies whose loyalty
is guaranteed by transfers of wealth stolen from the Russian
people. Russia has violated the territorial integrity of a
European state and interfered with the elections of a number of
OSCE participating States, including the United States. And, of
course, Russian citizens continue to suffer from the policies
of their own government on a daily basis.
Russian opposition leader Boris Nemtsov, who was himself
murdered in 2015 within sight of the Kremlin walls, deemed the
Magnitsky Act, quote, ``the most pro-Russia law for justice.''
We do sincerely hope that the Magnitsky Act will one day lead
to justice, not only for Sergei Magnitsky and his family and
friends, but also for all Russians who suffer violations of
their universal rights by a state that believes it is
accountable to no one.
We have three remarkable witnesses to speak to us today
about what the Magnitsky Act has accomplished, as well as what
still needs to be done to encourage Russia to respect the
rights of its citizens and live up to its OSCE commitments.
We will first hear from William Browder, the CEO of
Hermitage Capital, the firm that was plundered to the tune of
$230 million in a massive tax-evasion scheme by Russian
authorities. Mr. Browder has worked tirelessly for the past
eight years, at great risk to his own safety, to bring those
responsible for Sergei Magnitsky's murder to justice. I
strongly encourage any of you who have not read the book ``Red
Notice'' to do so. It is a gripping and unforgettable account
of massive corruption, torture, and murder with impunity.
After that, Garry Kasparov will provide us with a broader
view, addressing the full scale of corruption and human rights
violations in Russia. Mr. Kasparov is well known to most of us
as one of the greatest chess players in history, becoming the
youngest world champion ever at age 22 in 1985. He's now 32, I
believe. [Laughter.] But I don't count very well. After 20
years at the top of the chess world, he gave it up and joined
the fledgling Russia pro-
democracy movement in 2005. He participated, along with Boris
Nemtsov, in the May 2012 Bolotnaya Square demonstrations, one
of the biggest protests held in Russia since the 1990s. These
protests were followed by an extensive crackdown that forced
him to leave the country and relocate to New York. Mr. Kasparov
is the chairman of the New York-based Human Rights Foundation,
and he has also found the time to write a book entitled
``Winter is Coming: Why Putin and Enemies of the Free World
Must Be Stopped.''
And then we will hear from Honorable Professor Irwin
Cotler, who will testify about his work to pass a Canadian
version of the Magnitsky Act. The pressure from Russia on Mr.
Cotler and other Canadian backers of that bill has been
immense, just as it has been in every other country that has
considered passing a version of the Magnitsky Act. Professor
Cotler has a distinguished career in advancing human rights
around the world, not only as Canada's attorney general and
justice minister, but also as founder and chair of the Raoul
Wallenberg Center, an institution dedicated to bringing
together all parts of civil society in the defense of human
rights.
And so we welcome our panel. And before we proceed to
testimony, I'd like to ask my distinguished Co-Chair, Mr. Smith
of New Jersey, if he would like to make any remarks.
HON. CHRIS SMITH, CO-CHAIRMAN, COMMISSION ON SECURITY AND
COOPERATION IN EUROPE
Mr. Smith. Thank you, Mr. Chairman.
First of all, I want to join you in thanking Ambassador
Killion for his service to the Commission. He served as
ambassador to UNESCO, where pervasive and systematic anti-
Semitism abounds to this very day, and he did a valiant fight
against those other ambassadors and those other countries. And
I want to thank him for that.
And I've known David since he was on the Foreign Affairs
Committee, working with Tom Lantos, so I want to thank him for
his service to our country and to the Commission. Thank you,
David.
Thank you, Mr. Chairman, for convening this very important
hearing on the fifth anniversary of the Sergei Magnitsky Rule
of Law Accountability Act. This all began with Sergei
Magnitsky's investigation into the brazen theft of $230 million
from the Russian people by officers of FSB Unit K in the
Interior Ministry. Sergei continued to expose Colonel Kuznetsov
and Major Karpov's plunder from foreign investors, and
documented how they lavishly spent it while millions of
Russians struggled to get by. For that, Kuznetsov and Karpov
illegally detained Sergei, repeatedly tortured him, and denied
him medical attention, all in the hope that they could force
him to confess and absolve themselves of their crimes. Sergei
was murdered because he would never confess to trumped-up
charges and never gave in to the brutality. Kuznetsov and
Karpov were only two out of 60 Russians that were determined to
be involved in this horrific crime and its coverup.
Congress passed the Sergei Magnitsky Act five years ago to
ensure that Sergei and his family got the justice they
deserved--at least a modicum of justice--and to send a message
to Russia that this will not stand. The identification and
sanction of those involved in all aspects of Sergei's illegal
detention, torture, and murder struck right to the heart of the
Kremlin's elite. It sent an unmistakable signal that the United
States of America is prepared to sanction all those involved in
human rights abuses in Russia.
In response, President Putin took his wrath out on innocent
Russian orphans who had been destined to be adopted by American
families. And I've met with many of them, as have many of my
colleagues. Some of those kids in Russia were in need of
serious medical attention, and their hopes of a loving family
and a happier life were dashed, all because the cynical Kremlin
elite saw harming vulnerable children as the best means to
retaliate against the United States.
Putin, still reeling from the impact of the Magnitsky Act,
lashed out at the U.S. Government and at many of us on this
Commission and in the House and the Senate. I was denied a visa
when I tried to do a trip on Magnitsky and also on human
trafficking, as the OSCE special representative for
trafficking. Russia has a huge problem with trafficking,
particularly of women into sex trafficking. And I met with
their ambassador, and I was denied and was told the reason was
the Magnitsky Act.
I would point out parenthetically that during the worst
days of communism, at least when I was in Congress--I got
elected in 1980, took office in 1981--I went in 1982 with the
National Conference on Soviet Jewry. They didn't want us there.
We spent 10 days in Moscow and Leningrad, met with refuseniks
including Sharansky's mother, but we got visas. The same thing
happened when Frank Wolf and I went to Perm Camp 35 just a few
years later. We got into the infamous Perm Camp where Sharansky
and many other political and refuseniks and others had spent
time, thousands of miles outside of Moscow in the Ural
Mountains. But we got visas. But because of the Magnitsky Act,
this penalty, this punitive action has denied many of us visas
to go there to raise human rights issues face to face with the
Kremlin elite.
So I want to thank you, Mr. Chairman, for convening this
important hearing. I have to point out at 10:00 we have a
markup on four bills in the Foreign Affairs Committee. I have
to speak on two of them, so I will have to leave. But I wanted
to know the three distinguished witnesses who are here in our
room--Irwin, we worked so long and hard on combating anti-
Semitism--and thank you for your great leadership there as
well.
And, again, Mr. Chairman, I'm sorry to have to go.
Mr. Wicker. Thank you very much, Representative Smith.
Senator Cardin.
Mr. Cardin. Well, Chairman Wicker, first of all, thank you
for your leadership on the Helsinki Commission. You have been a
true champion on the human rights basket of the OSCE and the
U.S. participation, and I thank you for convening this hearing.
We do have three very distinguished witnesses here today,
and we thank all three for being here.
Mr. Browder, I remember when you first brought Sergei
Magnitsky to my attention in June of 2009, and I was shocked to
hear what had happened. And you were able to do something that
has been very difficult. What happened to Sergei Magnitsky was
not unique under Mr. Putin in Russia, but what made it unique
was your ability to tell that story to the international
community. And the international community was forced to take
action, and you were able to take that activity to help so many
people around the world. So I thank you for your courage, and I
thank you for making sure that we remember Sergei Magnitsky,
remember his courage, and are motivated by him every day.
To Mr. Cotler, I want to thank you. Canada has been our
true ally and friend because there was a lot of pushback about
taking action against Russia, and your leadership in Canada,
your leadership in helping us with the OSCE Parliamentary
Assembly was critical. And we thank you for that partnership,
for giving us international legitimacy to moving forward on the
Magnitsky Act.
And, Mr. Kasparov, I want to thank you because you
represent the Russian people, what the Russian people want.
This is not about penalizing Russia. It's about penalizing the
leaders of Russia for what they're doing, and first hurting the
people of their own country.
So I thank our three witnesses.
The tragic death of Sergei Magnitsky in November 2009 for
discovering $230 million of corruption, one of the largest in
the history of Russia, was just beyond our comprehension, that
the political leadership of Russia could stoop to that type of
level and take out the life of a very young lawyer. And we took
some action. We, the Helsinki Commission, said, look, we're
going to do some things.
And I remember conversations I had with the administration
on how we could perhaps use the visas or use the banking system
to take action against the known perpetrators, and those
conversations were going through the normal bureaucracy
problems that you see in the executive branch and in diplomacy.
So, in April of 2010, I sent a letter to Secretary of State
Clinton suggesting formally that she take action. And they were
considering it.
And then, Mr. Chairman, we came to the conclusion that for
this to really work--we knew the executive had the authority,
but would they exercise that authority? Because when you talk
about bilateral relations with countries, there's so many
things on the agenda; will human rights really get the place it
needs? So we knew that Congress needed to act.
And the Helsinki Commission did get engaged on this issue.
I filed legislation, and I was proud of so many people who
joined in that. And I thank the Chairman, Senator Wicker.
Clearly, Senator McCain was one of our true champions through
this process, and our prayers are with him on his health as we
go through this. I also want to mention Kyle Parker, a staff
member of the Helsinki Commission who was critically important
in keeping us focused. And, again, this never became partisan,
and we worked it through the Senate.
I then went on the Senate Foreign Relations Committee and
got a little bit of a hostile treatment there. But a champion
emerged, and I have to mention that. Senator Lugar was a real
champion in giving us, again, the bipartisan support. Senator
Shaheen was a critical supporter on the Senate Foreign
Relations on this issue. And we got it enacted, and we
celebrate the fifth anniversary of its enactment.
But we didn't stop there, because it was Russia-specific
and we knew that these problems are global. And last year we
passed the Global Magnitsky Act.
I just really want to acknowledge that when we lead, we
find other countries that follow. And with Canada and U.S.
leadership, we've seen action taken in Estonia, in Lithuania,
in U.K., and we've made significant progress.
So I just really want to acknowledge the importance of the
work that has been done, but as I said earlier, we can't rest
on our laurels. There are serious issues globally taking place.
The administration is supposed to present their Global
Magnitsky list very shortly, and we'll be watching that very
closely. We also will be watching their implementation of the
Russian sanction law. That requires reports as early as next
month, and we'll be watching very closely to make sure they
comply with the laws that we have passed.
The bottom line is that the Helsinki Commission and the
United States Congress have taken leadership on this issue, and
we will continue to lead on protecting human rights globally.
Mr. Wicker. Thank you very much. And let me note at this
point that other representatives and senators may have
statements that they can enter into the record at this point.
But right now we are eager to hear our witnesses. And, Mr.
Browder, you are recognized for such time as you may consume.
Thank you.
WILLIAM BROWDER, CEO, HERMITAGE CAPITAL MANAGEMENT
Mr. Browder. Good morning, Chairman Wicker, Ranking Member
Cardin, Co-Chair Smith. Thank you very much for the opportunity
to come here and to testify on the fifth anniversary of the
passage of the Magnitsky Act.
I could have never imagined on the 17th of November, 2009,
the day that I learned that Sergei Magnitsky had been murdered,
that three years later the most important piece of human rights
legislation of this century would come into force in the United
States and be name after Sergei Magnitsky.
And on December 14th, 2012, five years ago today, when the
Magnitsky Act was passed, I could have never imagined that the
Magnitsky movement would emerge from the work that started
here, that would lead to five countries now having the
Magnitsky Act in place and many more with it on the agenda. We
truly have a global movement.
And I should emphasize that this global movement started
right here. It started with the Helsinki Commission. It started
first with a staff meeting. I had a staff meeting with Kyle
Parker--whom I guess you will recognize as now being your new
chief of staff shortly--in which I told the story of Sergei
Magnitsky. And this was actually in 2009, before Sergei
Magnitsky had died. It was while he was still alive and in
prison. And Kyle was so shocked by the story he said, I think
we should invite you to a Helsinki Commission hearing.
And it was at that moment that I met Senator Cardin. And
Senator Cardin heard the story while Sergei Magnitsky was still
alive. And because he heard this shocking story of injustice
and corruption while Sergei was still alive, when Sergei was
murdered, Senator Cardin was the first leader on the scene to
do something about it. And Senator Cardin introduced, in
October of 2010, together with Senator Wicker, Senator McCain,
and Senator Lieberman, the Sergei Magnitsky Act.
The Sergei Magnitsky Act was, as you have pointed out,
something where we then had Garry Kasparov and Boris Nemtsov
and various others coming and saying, this is not an anti-
Russian piece of legislation, this is a pro-Russian piece of
legislation, and it took on great resonance as other victims
came forward. And in spite of the fact that at the time the
U.S. administration was trying to reset relations with Russia,
this was one of the moments in Washington where morality
overcame realpolitik, and when it came for a vote in the Senate
it passed 92 to 4, as you know, it passed 89 percent of the
House of Representatives, and it was signed into law.
And I'm happy to be sitting here with you today knowing
that you decided not to stop with just that, but to take it
globally. And Senator Cardin, Senator Wicker, Senator McCain
then introduced the Global Magnitsky Act in 2015. And in spite
of fierce, aggressive opposition by the Russian Government--and
the Russian Government did not want to have the Magnitsky
legacy on the Global Magnitsky Act, and Natalia Veselnitskaya,
the famous lobbyist, showed up here in the halls of Congress
with highly paid lobbyists and lawyers and PR firms trying to
take the Magnitsky name off of that piece of legislation. They
went to Trump Tower to talk about this legislation. But in
spite of their great efforts, the Global Magnitsky Act passed.
On roughly the same day as Global Magnitsky passed in 2016,
the Estonians--a little country in the Baltics, right on the
border of Russia--passed their Magnitsky Act. And then the
U.K., the country where I live and where I'm a citizen, passed
the Magnitsky Act in May of this year.
And I'm particularly proud to be sitting here with Irwin
Cotler. Irwin Cotler is the father of the Magnitsky Act in
Canada. As Senator Cardin is to the Magnitsky Act in America,
Irwin Cotler is to the Magnitsky Act in Canada. I went to Irwin
in 2010. And it took us a little longer; it took us seven
years. But I actually had tears running down my face when I
watched the Parliament voting 277 to zero in favor of the
Canadian Magnitsky Act. And it was even more moving when I
brought the Magnitsky family to the Canadian Parliament a few
weeks later, and the Parliament stood up and gave the family a
two-minute standing ovation for the sacrifice that Sergei had
made.
And then, on the eighth anniversary of Sergei's murder, the
Lithuanian parliament voted 71 to zero, and the Lithuanians
passed it.
There are now a number of countries that are teeing up the
Magnitsky Act. Ukraine is going to introduce a Magnitsky Act.
Gibraltar, without any intervention from any activists, have
introduced their version of the Magnitsky Act. The South
African Parliament will be introducing a Magnitsky Act. And
there are many, many others.
As you can imagine, Putin has been not too happy about
this, and I've paid a high personal price for this. After the
U.S. Magnitsky Act was passed, I was put on trial, together
with Sergei Magnitsky, in the first-ever trial against a dead
man in the history of Russia. They sentenced me to nine years
in absentia to serve in a Russian prison colony. Afterwards,
they have applied to Interpol five times to have me arrested on
an Interpol arrest warrant. The most recent application came
right after the Canadian act was passed. Fortunately, Interpol
has rejected all five requests. The Russians have approached
the British Government on 12 different occasions asking for
mutual legal assistance and extradition. Thankfully, the
British Government has rejected all those requests.
But the Russians don't give up. They've since accused me of
serial murder. They've accused me of murdering Sergei
Magnitsky. They've accused me of espionage, of being a CIA/MI6
agent trying to destabilize Russia. They've accused me of
stealing $4.8 billion from the IMF. They've accused me of tax
evasion, fraud, and many other things.
They've not stopped with just legal nastiness. They've also
threatened to kill me. They have threatened to kidnap me. They,
of course, tried to arrest me, and various other things.
But I'm not stopping. I'm not stopping, and nor should you.
And so there are four things that we still need to do that
are on my list. The first is that, while we have a Magnitsky
Act, the Magnitsky list is incomplete. There are 44 people on
the Magnitsky list so far; 35 of them are involved in the
Magnitsky case. We submitted 282 names to the State Department,
and those many other unsanctioned people need to be sanctioned.
The second thing is that people have learned to evade
Magnitsky sanctions. There's a man named Dmitry Klyuev, who is
on the Magnitsky list. Dmitry Klyuev is the head of the Klyuev
organized crime group. And Dmitry Klyuev, shortly before being
put on the Magnitsky list, moved all his assets into the names
of nominees. I presented that information to the U.S. Treasury
to say that he and his nominees are in violation of U.S.
sanctions. So far, no action has been taken.
And it's not just Klyuev, but the entire concept of Bitcoin
and cryptocurrencies are a way to avoid Magnitsky sanctions and
all other sanctions. And this is a huge issue that needs to be
addressed going forward, because while these sanctions have
worked in the past, they won't work in the future if people can
move money anonymously around the world.
And then, finally, there is one provision in the Magnitsky
Act which most people don't know about, which I want to bring
to your attention, which is that it's also the U.S.
Government's responsibility to advocate for Magnitsky Acts in
other countries. It's in the law. At the moment, it's been used
informally, and I'd like to ask you to promote the idea that
the government formalizes its advocacy in other countries. And
the best place to do that will be at the G-7 meeting in June in
Canada. At the G-7 meeting there will be three countries of the
G-97--the United States, Canada, and the United Kingdom--that
all have Magnitsky Acts, and there are four other countries
that don't. And it should be a U.S. official policy, together
with the Canadians and the U.K., to promote it among our allies
at the G-7.
I should say that all of this stuff has happened because of
the great work of your Commission and the great work of my
colleagues here on the panel and other people. But it also has
happened because Sergei's story is biblical in its good versus
evil. And I hope that you will carry on in this campaign for
justice in this moment for Sergei Magnitsky.
Thank you very much.
Mr. Wicker. Thank you very much, Mr. Browder.
Mr. Kasparov, you're recognized.
GARRY KASPAROV, CHAIRMAN, HUMAN RIGHTS FOUNDATION
Mr. Kasparov. Thank you for having me here today, and to
Chairman Wicker and Co-Chairman Smith and Ranking Member Cardin
for holding these hearings on a topic of vital national and
international security.
I will understand if few of you recall that I spoke here
over 13 years ago, in May 2004, on a panel titled ``Human
Rights in Putin's Russia.'' At the time, Bill Browder and I
were still attempting to do our part to salvage democracy and
the rule of law from inside Putin's Russia, while the entire
democratic world preferred to ignore the true nature of what
Putin was doing in my country.
Mikhail Khodorkovsky had just been arrested. There were
still a dwindling handful of Russian media not under direct
Kremlin control. The Russian Parliament still had a few members
who would occasionally criticize Putin. Anna Politkovskaya, and
Boris Nemtsov, Sergei Magnitsky, and so many others who opposed
Putin were all still alive.
I am not the sort of person to wallow in nostalgia, but
it's hard not to think of how different Russia and the world
might be today had the free world taken a stand against
Vladimir Putin back then, before he had consolidated total
power in Russia. In 2004, Putin still needed friends on the
international stage, and he had many of them. By 2012 that
phase was over, and a far deadlier phase of dictatorship began,
when Putin needed not friends, but external enemies to justify
his eternal grip on power. Today, there is no longer any need
to discuss human rights in Putin's Russia. They are gone, and
Putin is revealed to all as what we warned he could become: a
dictator.
And please do not speak of Putin's supposed popularity. A
popular leader does not need to fake elections, or destroy the
free media, or jail critics and kill opposition leaders. Status
that is artificially fashioned by 24/7 propaganda, repression
of all dissent, and the elimination of all rivals is not
approval, it is dictatorship.
Here, 13 years ago, I said: ``Without Western attention and
pressure, the situation will only worsen during Putin's next
four years.'' We still dreamed that Putin could be forced to
hold real elections in 2008, but it was not to be. Later I
said: ``Putin is a Russian problem, for Russians to deal with.
But if he isn't stopped, he will soon be a regional problem--
and after, he will be everyone's problem.''
Fast-forward to 2006 and the murder of Russian anti-Putin
whistleblower Alexander Litvinenko in London with a nuclear
isotope; 2008, and Putin's invasion of Georgia, for which he
also suffered no consequences and was even rewarded with the
infamous American ``reset.'' Jump to 2012 and Putin's broad
crackdown against any and all opposition and demonstrations,
which led to Boris Nemtsov's murder and my own exile; to 2014
and Putin's invasion of Crimea and eastern Ukraine; to 2016 and
direct Russian interference in the American presidential
elections after similar activities in the U.K., Netherlands,
and elsewhere in Europe.
Natan Sharansky quotes Andrei Sakharov saying: ``The
country that doesn't respect the rights of its own people will
not respect the rights of its neighbors.'' And as the United
States discovered last year, in the age of internet we are all
neighbors.
For a decade now, many of us familiar with the reality of
Putin and his regime, including both of my fellow guests here
to offer testimony, have insisted that the only effective way
to pressure Putin is to target the only thing he cares about:
his hold on power in Russia. And that the best way to target
Putin's power is to take aim at his agents and cronies and
their money, to pursue the mafia that holds the levers of power
and who benefit the most from Putin's rule. The individuals who
can influence Putin must be targeted or there can be no
effective deterrence.
There is no national Russian interest Putin cares about
beyond propaganda value. In fact, Russian national interest and
Putin's interests are diametrically opposed in nearly every
way. Putin does not care about the Russian people, the Russian
economy, or the image of Russia abroad. I repeat: He does not
care. This is why legislation that targets Putin and his mafia
is pro-Russia, not anti-Russia. A strong, free, and democratic
Russia would be an ally of the West, and that can never happen
under Putin.
But I know that first and foremost we are here to discuss
the interests of the United States--its security, integrity,
and economic well being. Consider the American and other free
world policy goals of dealing with Putin's aggression. One, to
improve American and international security by deterring him
from further hostile acts. Ukraine, Syria, Venezuela, missile
tech to North Korea, election meddling--Putin's attacks are
asymmetric, and so the global response must be asymmetric as
well, by going after what matters to him most. Two, to threaten
Putin's grasp on total power in Russia by forcing his elites to
choose between loyalty to him and their fortunes abroad. Three,
to support the long-term interests of the Russian people by
exposing the corruption of our rulers. To all three of these
goals, the Magnitsky Act is the answer.
Putin's regime is a mafia, and you have to fight it like a
mafia. Very strong penalties must be ready and widely known. I
understand that deterrence is difficult because its fruits are
not apparent. If it works, maybe nothing visible happens. To
those who say that sanctions have not worked, can you say what
else Putin might have done without them in place, or why he
works so frantically to have them repealed?
Progress in a hybrid war is not measured in territory
conquered or battlefield casualties. Corrupting influence and
propaganda spread like contagious diseases. You can measure the
effectiveness of the Magnitsky legislation the way you measure
the effectiveness of antibiotics: You put a drop in the petri
dish and see if the bacteria stop growing, if the bacteria
respond to the antibiotic and die. By this measure, the
Magnitsky Act has been effective, and could be much more
effective if strengthened and implemented globally and
aggressively.
Last month, a Reuters report said anxiety was spreading
among Russia's wealthiest because of sanctions and the threat
of the U.S. blacklist. It reported that some business leaders
were trying to avoid being seen in public near Putin and to
distance themselves. This is progress. It shows the medicine is
effective. But anxiety is not enough to turn someone against a
brutal dictator. Avoiding photo-ops is not enough to bring down
a mafia. It's essential to increase the pressure, to continue
with what works now that the right path has been confirmed.
There is no other method.
Putin's weapons of hybrid war can only be defended against
at great difficulty and expense. Misinformation, cyberwarfare,
and his other methods are cheap and easy to deploy. And to take
it from a pretty good chess player, playing only defense is
always a losing game. The answer is deterrence. Putin and his
gang must understand that if he continues on this path, their
fortunes, their families' comfortable lives abroad, will be at
risk. They aren't really politicians, nor are they jihadists or
ideologues. They are billionaires who are used to profiting
from dictatorship at home while enjoying the good life in the
West, an advantage the Soviet leaders never had.
This is increasingly true of other hostile regimes around
the world: Small groups of ruling elites who do not care about
traditional national interests and diplomatic levers of power
because they are only interested in their personal success.
Engagement does not work with them. Diplomacy doesn't, either.
Magnitsky legislation does.
End the perverse double standards. Follow the money, the
real estate, the stock, and reveal it, freeze it, so that one
day it can be returned to the people from whom it was looted,
and to help rebuild the countries that have been drained for so
long. In Russia's case, the brittle nature of Putin's one-man
dictatorship will be exposed very quickly.
At a lecture in New York City in 1975, my Russian
predecessor-in-exile Aleksandr Solzhenitsyn said, ``The men who
created your country never lost sight of their moral bearings.
Their practical policies were checked against that moral
compass. A practical policy on the basis of moral
considerations turned out to be the most farsighted and most
salutary.'' That is, the most moral policy turns out to be the
most effective policy.
The alternative to appeasement is not war, it is
deterrence. And worrying about retaliation is absurd when Putin
will continue to escalate anyway, as long as he thinks he can
get away with it. The best way to avoid an escalating conflict
is to convince your opponent that he will lose. And make no
mistake, there is a war going on, whether you want to admit it
or not. It's very easy to lose a war that you refuse to
acknowledge even exists. Engagement has failed, because Putin
was never your friend. There is no common ground. Now he has
revealed his true colors as a sworn enemy of the free world.
And time is of the essence.
Thank you.
Mr. Wicker. Thank you very much, Mr. Kasparov.
Mr. Cotler.
IRWIN COTLER, PC, OC, CHAIR, RAOUL WALLENBERG CENTER FOR HUMAN
RIGHTS
Mr. Cotler. Thank you, Senator. I'm delighted to be able to
participate here in the common cause which brings us together,
the struggle against the cultures of criminality and corruption
and, in particular, the impunity that underpins them. And this
is part of a large struggle for justice and accountability,
both domestically and internationally. We meet, as has been
mentioned, at an important moment of remembrance and reminder--
the eighth anniversary of the torture and murder of Sergei
Magnitsky, who not only uncovered the largest corporate tax
fraud in Russian history, documented it, but paid for it with
his life. And where, in a move that would make Kafka blush,
Magnitsky was posthumously prosecuted for the very fraud and
criminality that he had exposed.
The fifth anniversary of the adoption here in the United
States of the Sergei Magnitsky Rule of Law Accountability Act
and which, in particular, inspired other similar initiatives
elsewhere, including in Canada, and the immediate aftermath of
the unanimous adoption on October 18th by both houses of the
Canadian Parliament of global justice for Sergei Magnitsky
legislation, titled formally Justice for Victims of Corrupt
Foreign Officials Act.
Accordingly, what I would like to do here is first
summarize briefly the process in Canada as a matter of
chronology and content that led to this historic, albeit
belated, Canadian initiative; second, summarize the raison
d'etre for this legislation; and finally some brief comments
dovetailing with what my colleagues and witnesses put forward
to you--brief comments, where do we go from here in Canada and
internationally.
First, having regard to the genesis and development of the
Magnitsky process in Canada--it was inspired, not unlike the
situation here in the U.S., by an encounter that I had with
Bill Browder in 2010, and which led to the launch of the
Justice for Sergei movement in Canada. A series of initiatives
in November 2010 alone, following that encounter, provide a
looking glass into the character and content of the movement,
which included then a meeting of our foreign affairs
subcommittee on international human rights, with Bill Browder
as our principal witness on November 2nd, and then unanimous
adoption by the foreign affairs subcommittee of my motion at
the time calling inter alia for justice for Sergei Magnitsky
legislation, modeled on the U.S. initiative.
One year later, I introduced a private members bill titled
``An Act to condemn corruption and impunity in Russia in the
case and death of Sergei Magnitsky,'' which was the first
legislative initiative of its kind in the Canadian Parliament.
But coming from an opposition party member, it required support
from the government of the day, which regrettably was not
forthcoming. In 2012, Boris Nemtsov, who has been mentioned, a
leading Russian democrat, came to Canada to support my private
member's bill, along with Vladimir Kara-Murza, and where he
mentioned at the time, as has been characterized here, that
justice for Sergei Magnitsky legislation would be the most pro-
Russian legislation, on behalf of the Russian people, that we
could adopt.
Later that year, together with Bill Browder and really
under his leadership, we launched the Justice for Sergei
Magnitsky Interparliamentary Group, which led to resolutions
being adopted in the European Parliament, other European
countries, and subsequently adoption of legislation itself in
Estonia, Lithuania, and the like. In 2013, the pattern of
unanimous motions continued, but the focus now shifted to
making representations to the Canadian Government, where we
conveyed the documentary evidence that you had collected here
at the time, of 60 Russian officials. But our efforts, again,
to get government action in Canada were unavailing.
The year 2014 began with Canada sanctioning Russian
officials for their aggression in Crimea and Ukraine. And I
remember saying at the time that had we moved earlier to
sanction Putin's Russia for their domestic repression, we might
have perhaps sent a signal that may have foreclosed the
developing externalized aggression. And then Russia retaliated
for those actions by banning 13 Canadian parliamentary leaders,
including Member of Parliament Chrystia Freeland, who was later
to become minister of foreign affairs, and myself, with respect
to the Government [of Canada].
So I might add parenthetically that 12 of the 13 who were
banned were all those who had taken a leadership role in the
Canadian Parliament, in some level, in seeking sanctions for
Russia's aggression in Crimea and Ukraine. I can say that I had
not been as initiatory as they were, or as vocal as they were.
So the Russians were asked, well, why did you ban Cotler? He
wasn't as vocal anywhere as near as the other 12. And they
said, oh, with Cotler, we have a long history. It goes back to
1979, when he was expelled for defending Russian dissidents.
And the banning continued for another decade, et cetera. So
Putin's Russia has a long memory, going back even to earlier
times.
2015 witnessed a number of dramatic developments, which
finally began to move us in the direction of legislation. In
February 2015, Boris Nemtsov was murdered, right outside the
Kremlin. This outrageous act provoked such a response in
Canada, both within and without the Parliament, that in March
2015 the House unanimously adopted my motion calling for global
justice for Sergei Magnitsky legislation--again, inspired by
parallel developments here in the U.S. And I must say, in my
remarks in the House at the time I said I could feel the spirit
and inspiration of Boris Nemtsov when we unanimously adopted
that motion.
In June, I introduced again a private member bill, this
time global justice for Sergei Magnitsky legislation. The
conservative government finally agreed to adopt this
legislation. The process was adjourned, however, by the calling
of an election in the summer of 2015. In the course of the
election, all three parties committed themselves to adopt such
legislation. The liberal party won the election, but the
momentum for such legislation was stalled. References were made
to the fact that we have sufficient existing sanctioning
authority under our legislation, and that we didn't need a new
legislation. That was the position of the then-Foreign Minister
Stephane Dion. And that it might prejudice our, quote-unquote,
``re-engagement'' with Russia at the time.
Accordingly, we reignited the parliamentary process, now in
both houses, and again with the witness testimony of Bill
Browder, Vladimir Kara-Murza, Anna Nemtsova--Boris Nemtsov's
daughter--and Garry Kasparov. A number of developing factors
now underpinned that momentum, but I'll just mention two of
them. A unanimous report from the foreign affairs committee
calling for global justice for Sergei Magnitsky legislation. I
have here the cover of the report\1\ that came out of the
parliamentary foreign affairs committee, as it had a picture of
Sergei Magnitsky on the cover, to denote the legislation of
Sergei Magnitsky's case and cause for the legislation.
---------------------------------------------------------------------------
\1\ The full report can be accessed at: http://www.ourcommons.ca/
Content/Committee/421/FAAE/Reports/RP8852462/faaerp07/faaerp07-e.pdf
---------------------------------------------------------------------------
As well----
Mr. Wicker. Sir, that is a report from the Canadian
Parliament?
Mr. Cotler. Correct. Foreign affairs committee, unanimous
report.
Mr. Wicker. Let's go ahead and put that in the record at
this point. Without objection, that'll be done. You may
proceed.
Mr. Cotler. I also might remark, the leadership of the
newly appointed foreign minister Chrystia Freeland, who in May
2017 announced government support for Sergei Magnitsky
legislation, following upon the report from the foreign affairs
committee subsequent hearings as well. All of which led to a
succession of Russian threats, emanating both from the Russian
embassy in Canada and Putin himself, warning Canadian
parliamentarians against adoption of what he called this toxic
legislation, and the terrible impact it would have on Canada-
Russia relations.
Fortunately, we had a Raoul Wallenberg all-party
parliamentary caucus in Canada we initiated in 2016. And on the
eve of the two houses voting on Sergei Magnitsky legislation,
we called for not only the adoption of this legislation, but to
make that adoption unanimous in both houses of parliament, so
that we would send a message to Putin's Russia that we will not
be intimidated and we will not be deterred by such threats. And
so the legislation, and Bill Browder mentioned, was passed
unanimously, 277 to zero, and received royal assent on the same
day.
Let me now move to the second part of my comments, and very
quickly, and that is the objectives and purposes of such
legislation, the global justice for Sergei Magnitsky
legislation in general, which you've now adopted here as well
as that of the earlier justice for Sergei Magnitsky
legislation.
First, to combat the persistent and pervasive culture of
corruption, criminality, and impunity, and the externalized
aggression abroad, of which Putin's Russia is a case study.
Second, to deter, thereby, other prospective violators,
because if we indulge that culture of impunity in Russia or
elsewhere, we only embolden the human rights violators. But if
we sanction these violators, we can deter others because they
know there's a price to be paid for their corruption and
criminality.
Third, to make the pursuit of international justice a
priority and a pillar of our human rights policy, both domestic
and international. And I'm speaking both of the United States
and Canada, and linking up with what Bill Browder said in that
regard.
Fourth, to uphold the rule of law and justice and
accountability in our own territories through the visa bans,
asset seizures and the like. Recent evidence of how Magnitsky
assets have been laundered in Canada is but one case study of
the importance of having such comprehensive legislation.
Also, as it was argued yet again in the Russian threats
that we are interfering with the sovereignty of Russia, our
response has been: We are not interfering with the sovereignty
of Russia or any other country. What we are seeking to do is to
protect our own sovereignty, our own rule of law, our own
economy, and exclude these would-be perpetrators from
exercising what is, in effect, a privilege and not a right to
enter our country.
Fifth, to protect Canadian businesses operating abroad.
Magnitsky not only uncovered the largest corporate tax fraud in
Russian history, but it was perpetrated against a U.K.-based
entity, headed by Bill Browder, Hermitage Capital. So that this
type of legislation would protect not only the integrity of
commerce in Canada, but also our Canadian businessmen operating
abroad.
Final point here: It's important to appreciate that this
legislation targets human rights violators and not governments,
targeting individuals and not governments themselves. Finally,
and I think most importantly, it tells the human rights
defenders, the Magnitskys of today, that they are not alone,
that we stand in solidarity with them, that we will not relent
in our pursuit of justice for them, and that we will undertake
our international responsibilities in the pursuit of justice
and the combatting of the cultures of criminality and
corruption, let alone, in particular, the impunity.
And where do we go from here? Closing remarks. Number one,
and I associate myself with all the initiatives that were
suggested by Bill Browder in that regard. Third, and also
connected with what he said, we need to internationalize the
global justice for Sergei Magnitsky movement and secure as many
participating countries as possible. As Boris Nemtsov put it:
The adoption of Magnitsky legislation by EU countries would be
a serious blow to the criminal regime in Russia. And as he
added, if you want to protect yourself against Putin's thieves,
murders, and corrupt officials--speaking to the European
Parliament, you must adopt the Magnitsky law.
Fourth, as Bill put it, three of the G-7 countries have now
adopted Magnitsky legislation. Canada assumes the presidency of
the
G-7. And the next G-7 meeting will be held in Quebec. We should
seek to mobilize for such legislation in the four remaining G-7
countries, Germany, France, Italy, and Japan. And here, the
United States has a distinguished and distinguishable role to
play.
Five, we need to make the OSCE a focal point of our
advocacy for justice for Sergei Magnitsky legislation, anchored
in our commitments under the Helsinki Final Act. We have not
only a right, but a responsibility to hold Russia, an OSCE
State, accountable for its standing violations of its
commitments under the Helsinki Final Act.
Sixth, the assault on human rights and the rule of law, and
the imprisonment of human rights defenders in Russia, is a
standing violation as well of Principle Seven of the Helsinki
Final Act, the right of people to know and act upon their
rights. And here, too, Russia must be accountable to free its
political prisoners. Finally, from a global perspective, global
justice for Sergei Magnitsky legislation can help us combat the
resurgent global authoritarianism that we are witnessing today,
and the culture of impunity that underpins it, by sanctioning
human rights violators, be they in Russia, Venezuela, or South
Sudan--which is something that Canada has done in the immediate
aftermath of adopting our legislation--on October 18th we
sanctioned 30 senior Russian violators, 19 Venezuelan officials
including President Maduro, and three from South Sudan.
Mr. Chairman, we also--when I hear Bill Browder's
testimony, need to reform the Interpol regime so that it is not
used and abused in the way it has been. And our own minister of
public safety, Ralph Goodale, in Canada, has announced that he
is prepared to take the lead, in concert with others, for that
purpose. At the end of the day, in adopting Magnitsky
legislation, we make a statement not only of what we must do,
but also of who we are.
Thank you, Mr. Chairman.
Mr. Wicker. Thank you very much. And thank you for your
compelling testimony, to all three of you, and also for your
courage. I know it's taken quite a bit.
Mr. Browder, just to follow up on that last point, there's
no one in the leadership of Interpol that seriously is taking
the position of the Russians, that you should be detained or
arrested, is that correct? Is there a debate within Interpol?
Mr. Browder. Well, I'm not a member of Interpol. Russia is
a member of Interpol. [Laughs.] And so they're accountable to
their members, not to me, not to Irwin, not to Garry. And as
such, as a member, they've been an errant member of Interpol.
Interpol has rules that says they shouldn't be doing things
like pursuing people for political purposes. And those rules
have been upheld. Having said that, the Russians applied for me
in 2013. Interpol rejected it.
They came back three weeks later. Russia applied, they
rejected it again. They came back in 2014 and applied. Interpol
rejected it again. And then, strangely, Interpol has allowed
twice in this year, once just as I was coming to the United
States to testify in front of the Senate Judiciary Committee
and once right after the Canadian Magnitsky Act was passed,
where they put me on the Interpol list, and I was on the
Interpol list, accepted for some period of time.
And so there may be people in Interpol who are
appropriately behaving. Having said that, Interpol is being
abused wildly. And I'm not the only one. There are many other
people who have suffered multiple attacks by Interpol where
it's clearly been politically motivated. And so Interpol
obviously needs to clean up their act if they're supposed to be
a crime fighting organization, not a criminal organization, or
an organization acting on behalf of criminals. And so there's
serious reform that needs to be done.
Mr. Wicker. How transparent is the governing body of
Interpol?
Mr. Browder. Interpol is a black box. Interpol is also
very, unfortunately, unjudicially reviewable, which means that
if somebody puts an arrest warrant out for you in any country,
probably even North Korea, you have to go to a court--maybe not
North Korea--but most countries you have to go to a court or
the officials have to go to a court to get an arrest warrant.
Interpol, there's no court. And you can't go to a court to
appeal an Interpol red notice. So if they decide or they don't
decide, there's no consequence. You can't sue them. You can't
judicially review them. You can't do anything. And therefore,
it continues to be a black box. The United States is probably
the single largest contributor to Interpol. And the United
States can fix Interpol, based on its financial contribution.
Mr. Wicker. I know others are anxious to ask questions. Let
me give you an opportunity to clear up something. And I may
have misspoken in my opening statement. Mr. Kasparov says
follow the money. Mr. Cotler says something about laundering.
How are you doing tracing the $230 million? And that really was
stolen from the Russian people, was it not?
Mr. Browder. That's correct.
Mr. Wicker. OK, if you'd clear that up. Because I didn't
want to imply that you, Bill Browder, lost $230 million. It was
a fraudulent, ridiculous tax refund that raided the treasury
that belonged to the Russian people. Would you comment on that?
Mr. Browder. That's a very important distinction. We did
not lose any money in this fraud. The Russian people lost $230
million, which is what makes it so egregious. So----
Mr. Wicker. A very readily responded to request for a big
refund on the Treasury.
Mr. Browder. On Christmas Eve 2007. The largest tax refund
in Russian history. Granted without any questions asked.
Mr. Wicker. Right. Right. How we doing tracing where that
money went?
Mr. Browder. Well, we've traced all the money. We found all
the money. And the money has come to a lot of different
countries. It's come to the United States. The Department of
Justice froze $14 million that belonged to a company owned by
the son of a Russian Government official called Prevezon. The
money has gone to Switzerland. $20 million went to Switzerland.
Prevezon's money and money belonging to the husband of the tax
official who refunded it. Money went to the Netherlands. More
than 3 million euros has been frozen by the Dutch authorities
that belongs to Prevezon, again. Money went to France. About $8
million has been frozen in France. And there are criminal
investigations now opened up in a dozen different countries.
And I've learned a tremendous amount about money laundering in
the last eight years, working with law enforcement, tracing
this money, and helping law enforcement prosecute the people.
And this is where I become so agitated about the whole
concept of cryptocurrencies and Bitcoin, because the reason
we've been able to trace the $230 million is because when you
send dollars or you send euros, in the dollars case, it goes
through the Fed wire system. And there's a permanent trail of
every movement of those dollars. And a permanent trail that
goes back to banks and people and know your customer due
diligence and authorities and regulators, et cetera. And that
allows law enforcement and the good guys to get the bad guys,
and stop the criminals. With Bitcoin and cryptocurrencies
that's not possible. And two days ago one of Putin's economic
advisors, Sergey Glazyev, publicly promoted the idea of
cryptocurrencies to work around sanctions. And we really need
to respond to this quickly.
We didn't respond to Facebook and Twitter quickly enough so
that the Russians could do all sorts of crazy stuff in
manipulating politics all over the world and that. Technology
moved quicker than regulation. We're going to be in the exact
same situation with cryptocurrencies unless we get on it very
quickly.
Mr. Wicker. Thank you.
Mr. Cohen.
HON. STEVEN COHEN, COMMISSIONER, COMMISSION ON SECURITY AND
COOPERATION IN EUROPE
Mr. Cohen. Thank you, Chairman.
I'm just in awe to be in front of you three gentlemen. This
is probably as distinguished a panel as I've seen in my 11
years in Congress. You've all had amazing lives, shown great
courage, and changed the world for the better in a way that we
all should be doing to advance freedoms and stand up for
justice.
The Magnitsky law has obviously been effective, in that it
is what has caused Mr. Putin and his government to take over
and interfere with our elections. That is what they, I believe,
see as a way to get the Magnitsky law repealed. They allegedly
and apparently, and I believe, engaged in that meeting at Trump
Tower for the purpose of getting relief on Magnitsky. It was
not anything to do with adoption.
Do any of you have any information that you can give us
concerning Russian involvement with our President, with our
election processes, or with other information that we need to
know? This is not a chess game. [Laughter.]
Mr. Kasparov. First of all, I'd like just, Mr. Chairman, to
make one comment, following Bill's words about Interpol. As a
chairman of Human Rights Foundation, I've been dealing
regularly with complaints from dissidents from many countries
when authoritarian regimes have been abusing Interpol red
notice to prosecute political leaders living in exile. This is
a common practice. And it's not just only Russia. It's
something inherently wrong with Interpol, which as Bill
described is a black box. You can only see your name appearing
or this red notice on internet, on a list, but you are not
privy to any legal process, how they then appear there and what
is in a notice sent by the government.
Unfortunately, quite a few authoritarian regimes are
enjoying the rights to issue red notices. And if not for Bill's
notoriety and his involvement in Magnitsky Act, he could be in
real trouble. And thanks to the United States Senate and the
House for defending him and removing him from the list. But
many other people without the same prominence, they are just
suffering. And there's very little can be done unless Interpol
is faced with serious actions, starting here, to stop
accommodating world dictators.
Now, regarding this involvement, there's certain things I
can confirm from my own personal experience. For instance, I've
no doubt, as someone who was raised in the Soviet Union and is
familiar with the way the Communist system and KGB work, that
this type of operation of meddling in the U.S. elections could
be authorized only by Vladimir Putin. There's no way that it
just could be done by some low-key operators. Clearly, the
Magnitsky Act was one of the elements of this collusion and
meddling. And the joke is that the word ``adoption'' now is
used like a code name for sanctions and lifting sanctions.
And the Magnitsky law is viewed by Putin's regime as the
core problem that started all other sanctions. So it's a top
priority of Russian Government. And you could see the
activities not only here, but across Europe to prevent other
countries from entering the same legislation. And, again, while
I cannot say anything with 100 percent confidence, but from my
personal experience I believe that the Russian interference
here had a clear goal of helping Putin regime out of the
sanctions regime.
Mr. Cohen. Anybody else have anything to offer? Mr.
Browder?
Mr. Browder. So, looking at this situation, Vladimir Putin,
he runs a hundred operations with the expectation that 99 of
them will fail. In terms of meddling with U.S. elections,
meddling with British elections, meddling with Catalonian
independence, meddling with German elections, meddling with
French elections, it's a matter of fact that they do that. And
the U.S. intelligence agencies have all confirmed that. The
French intelligence agencies confirm that they were meddling in
the French elections. It's now been confirmed that they were
meddling in the Brexit debate.
And so there's no question about what Putin was doing. And
the only question, which I don't have an answer to, is whether
he was doing it on his own volition, or whether he was doing it
in some type of agreement with the Trump administration. I have
no evidence to argue one way or another on that second point,
but I'm very satisfied that there is a credible law enforcement
team put together that will answer that question, with 100
times the information that I have to be able to make that
judgement.
Mr. Cohen. Thank you, sir.
Mr. Cotler----
Mr. Wicker. Thank you.
Ms. Moore.
Oh, Mr. Cotler, would you just respond.
Mr. Cotler. Yes, just very briefly, that in November, a
Russian TV show featured Russian lawyer Natalia Veselnitskaya,
with respect to the charges being brought against Bill Browder.
This is the same person who, in a June 2016 meeting at Trump
Tower in New York City with Donald Trump, Jr., at the time when
it first came to light it appeared--and if you look at the news
reports at the time--that all this was in relation to a Russian
Government effort to aid Donald Trump's campaign by giving
information that could be used against Hillary Clinton.
However, it subsequently emerged that the real reason at the
time was in order to bring about the repeal of the Magnitsky
sanctions.
So one could see that even the interference in this
American election had as its objective not only, if you will,
matters relating to the election of Donald Trump against
Hillary Clinton, but whoever was elected, to bring about the
repeal of the Magnitsky sanctions. And in fact, right after
President Putin was elected, back in 2012, his first foreign
policy statement at the time addressed the issue of the odious
Magnitsky sanctions.
So this is something that is top of mind and policy with
regard to Putin's Russia, to the point where it's not only a
case of interfering in elections, but it is also a brutal case
of targeting the heroes of this movement. And in terms of not
only the murder of Sergei Magnitsky, but Boris Nemtsov, who was
the leading campaigner for justice for Sergei Magnitsky
legislation internationally. And also, I believe, paid for it
with his life. Vladimir Kara-Murza, who came before our foreign
affairs subcommittee on human rights, testified, went back to
Russia, was poisoned, almost died. Came back later after he had
recovered, testified before our committee again, went back to
Russia, was poisoned again and almost died.
You see the clear linkages here with regard to his
testimony and then his poisoning. The death threats that have
been received by my colleagues on this panel, the murder of
witnesses related to subsequent proceedings regarding justice
for Sergei Magnitsky legislation elsewhere, or lawyers
connected with it. What you have here is a pattern of
criminality and coverup that also must be seen in relation to
the pattern of corruption and the pattern of interference in
elections and the like.
Mr. Cohen. I have votes, so I have to leave. But I take my
hat off to you. [Doffs hat.] And I would stay for the remainder
of your testimony if I wouldn't be scolded by my leader.
Mr. Wicker. Well, Mr. Cohen, you tell them that they need
to hold that vote open for Ms. Moore, because she's going to
have an opportunity to ask her questions. So do what you can
with the speaker.
Ms. Moore.
HON. GWEN MOORE, COMMISSIONER, COMMISSION ON SECURITY AND
COOPERATION IN EUROPE
Ms. Moore. Thank you so much, Senator Wicker.
And I just want to thank the panelists for being so brave.
This is like something straight out of a spy novel. You can't
make this stuff up.
I'm going to start out by asking a question--I'm
embarrassed because I perhaps should know the answer to this.
Mr. Browder, you say that there are 282 persons that should be
on this Magnitsky list, and only 35 of them have been on the
list, and that every December it's updated. Do we know yet if
that list has been upgraded?
Mr. Browder. You shouldn't be embarrassed to ask the
question, because I'm asking the same question myself.
[Laughter.] So every year in December the list is added to. And
every year in December it has been added to. We're now in
December and it should be added to.
Ms. Moore. Is this a U.S. Department of Justice's task?
Mr. Browder. This is the U.S. State Department and the U.S.
Treasury Department. It will be published by the Treasury
Department. It has been prepared together between the State and
Treasury Department. They are the ones who have been delegated
the responsibility to do this, and they're the ones who are
supposed to do this. And I'm keeping my fingers crossed and
hoping that they do do this, and that there's a very robust
list that come out.
Ms. Moore. Well, I think the Treasury Department has been a
little busy lately. But having said that, do we know whether or
not--this is the first year of a new administration, and a new
Treasury Department and State Department. Have we had any
indication in our communications--perhaps this is to Senator
Wicker--that there's been an ability to compartmentalize
enforcing the Magnitsky Act, and the President's disbelief,
essentially, that the Russians interfered with our elections?
Has there been any evidence that compartmentalization has
happened--that we've been able to accomplish that?
Mr. Browder. We will only know----
Ms. Moore. When the list comes out.
Mr. Browder. It's a very pregnant moment. Either the list
will be published, or no list will be published--and each
action will have a greater significance than just that list.
Ms. Moore. I see. OK. Mr. Kasparov, you wrote a book,
``Winter is Coming,'' and I guess you indicated that there's a
new authoritarian playbook, and that previous totalitarian
regimes have learned and upped their game. So can you just
briefly share with us the evidence of those new tactics, what
you think we ought to be able to do and perhaps what you think
we can do about protecting the Voice of America and Radio
Liberty.
Mr. Kasparov. Just following your first question, I can add
that from our observations this year the State Department was
much less active than before. And maybe we'll see the sanctions
list, but so far we don't have the same kind of activities that
typically have been cooked within State Department, regarding
Magnitsky law and other sanctions.
Now, speaking about new tactics, as a matter of fact, we
saw it many years ago in Russia. And we have to give credit to
Putin and his KGB cronies for changing the old-fashioned
propaganda way of getting the story. Back in the Soviet days,
they had a story to sell, the ideology. And it's always a
problem because you have many arguments. Selling something
requires power of conviction. And also, people may disagree.
Putin's concept is different. It's not one story to sell, but
it's basically telling you the truth is relative.
And they discovered this algorithm I think back in 2004-
2005, when they realized that they had to deal with the growing
influence of the internet in Russia. And there were two ways.
One, you followed China and built a firewall. They didn't like
it. and so they've moved into the sort of gray area, just using
KGB tactics, creating some fake websites. They all presented
some stories. Like, 90 percent of the true stories, but each
site carried a piece that was part of the combined Kremlin
message. They realized that if you have some websites that are
allowed to criticize Putin and talking about corruption, these
sites can defend KGB--telling that KBG involvement in apartment
bombing in 1999 was a fake, and there's more credibility there.
By using these tactics in Russia, they saw this success and
they moved to so-called near abroad, the former Soviet
republics. Estonia was the first to be attacked. And then they
moved to Europe. So when they actually entered the United
States, this is the meddling in U.S. elections; they already
had more than a decade of the experience of creating these fake
websites, fake industry as an institution, the troll factories
that have been in operation for more than a decade. And
unfortunately, this country and the European Union paid more
attention--or, actually, preferred to ignore the fact that
Russia has been building its presence in media around the free
world.
For instance, we look at the last elections in Germany. We
have to give Putin credit for building Alternative for Germany,
the Neo-Nazi party, almost from scratch by using Russian-German
community and having the German-speaking media. And as a
result, you have 94 Neo-Nazis in German Bundestag. So Putin
just recognizes that the free world offered him many
opportunities to play these games. And it's fairly cheap. You
don't have to spend a lot of money for this good intervention.
And unfortunately, it had worked.
Ms. Moore. I thank you so much. And I sure feel anxious
about the votes, but I just want to comment: We got about a
half million sort of fake responses about net neutrality. It's
a big deal with regard to whether or not the internet will have
faster or slower lanes based on commercial interests. And
they've been all tracked back to Russia. So this is a real
threat at every level. I do thank you for your appearance. And
I'm sorry that I have to leave so soon. But I leave you in very
capable hands.
Mr. Wicker. Thank you, Ms. Moore.
And just in response, the State Department informs the
Commission that the Magnitsky and Global Magnitsky lists will
be published in the next week or two. So we'll see. And perhaps
members of the State Department, staff members, are listening,
even as we speak.
Senator Whitehouse.
HON. SHELDON WHITEHOUSE, COMMISSIONER, COMMISSION ON SECURITY
AND COOPERATION IN EUROPE
Mr. Whitehouse. Thank you. Thank you, Chairman.
And thank you to the panel for being here. You have all
shown--indeed, exemplify--significant courage. And we are
grateful to you.
I would like to propose to all of you the following thesis,
and ask your reaction to it. The thesis has one broad element
and a narrower element.
The broad element is that the true clash of civilizations
in the world today is between the rule of law and countries
that are governed by kleptocracy, autocracy, and criminality,
that much of the evil that threatens our rule-of-law countries
arises out of kleptocracy, autocracy, and criminality. And that
consequentially it is a strategic imperative for the rule-of-
law countries to address the underlying problem of kleptocrats,
autocrats, and thieves. That's the broad part of the thesis.
The narrower part of the thesis is that the kleptocrats,
tyrants and thieves ultimately seek sanctuary for their
families, their assets, and themselves in rule-of-law
countries. If you keep your ill-gotten gains in kleptocracy,
autocratic, and corrupt countries, you're just waiting for the
next bigger thief to come and steal what you have stolen. And
the quality of life generally sucks. So they need to get out in
order to succeed at their game. And here's where it gets a
little bit smelly, because our laws, our lawyers, and other
professionals provide and facilitate that very sanctuary. And
the most prominent feature of that sanctuary is probably
allowing shell and shelf corporations to obscure the identity
of the kleptocrats, the autocrats, and the thieves so that law
enforcement, the press, and others can't follow the
connections.
I'll close my thesis by narrowing it right to this
particular act, because it strikes me that shell and shelf
corporations are a very useful device for the corrupt
individuals specifically named in the Magnitsky Act to dodge
around and find sanctuary for their assets, notwithstanding the
law, by going through often sequential series of shell
corporations so that ultimately it all turns up in the name of
Wonderful Company, LLC someplace and, again, enjoying the
protection of rule of law.
I'd love to have each of you react to that thesis at
whatever level you choose.
Mr. Browder, you want to go first?
Mr. Browder. I could have given your speech just now. I
agree with it 100 percent. The entire basis for the Magnitsky
Act, inspiration for the Magnitsky Act, is exactly what you've
just described, which is that these terrible people commit
terrible crimes in their own countries. But they're so afraid
that their money will be stolen, they want to keep it in
countries that have a rule of law, that have property rights,
and have institutions where they can be physically safe.
Mr. Whitehouse. So the Magnitsky individuals, the ones
identified in the law, are really the tip of a much, much
bigger iceberg of kleptocracy and autocracy out there. And in
the same manner that we have paid attention to these
individuals, it would be wise for us as a nation to broaden our
reach and more systematically address this problem of providing
sanctuary for international evildoers.
Mr. Browder. Indeed. I would argue that we've come up with
a good concept. But the devil is always in the details, and the
devil is always within implementation. So as you've pointed
out, people can obscure their ownership. They can do so with
offshore companies, with nominees who don't even know they're
nominees in offshore companies, and even in America, Canada,
and various places like that. There are law firms, the
enablers, who are actively assisting them, earning big fees
with no consequences. And----
Mr. Whitehouse. As a lawyer, let me point out that there
are also accountants, realtors, yacht brokers, and various
other professionals involved in these transactions as well. So,
yes, the lawyers deserve some blame, but not all of it.
Mr. Browder. I don't want to single out the lawyers, but
the lawyers have played a big role, no doubt.
Mr. Whitehouse. They have played a big role and a nefarious
one.
Mr. Browder. And I would actually say something that's
quite controversial, and we've debated it here in the United
States. We've debated it in Canada. We've debated it in the
United Kingdom, as to what should be in the law. The law
currently applies to the people who commit the crimes. If you
really want to affect these people, you should include their
family members. If somebody knows that not only will their
freedoms be curtailed, but their family members will not be
able to send their kids to Ivy League schools, to boarding
schools in England. They won't be able to send their parents
for medical treatment at Harley Street and at the Cleveland
Clinic, all of a sudden, there's a totally different
calculation. And that would actually seriously raise the
effectiveness of this whole piece of legislation.
Mr. Whitehouse. Mr. Kasparov.
Mr. Kasparov. Yes, I couldn't agree more with your both
broad and narrow thesis. Actually, we're talking about a
system. It's $230 million is the tip of the iceberg, maybe it's
a drop in the sea, because thanks to Bill Browder, and his
efforts, you know, you could discover every penny of this 230
million [dollars]. But we were probably talking about an amount
close to $1 trillion that has been spread around. So using
similar schemes of looting money in Russia and parking them,
not in China, not in Venezuela, not in Iran, but in this
country, in the United Kingdom, in France, and you name it--in
countries where, as you said, this money is protected by the
rule of law.
And Putin realized that the Magnitsky law was an imminent
threat to the very foundation of his power, which was based on
a guarantee for all members of the gang to loot Russia, to
steal money there, and to place it safely anywhere in the world
they choose. And by the mafia rule, you have to offer full
protection to the last hitman in exchange for absolute loyalty.
That's why when I heard the comments from some of the opponents
of Magnitsky law saying, ``Oh, they are just, you know, second
or third tier of officials, why should we pay attention?''
It's about principle. Because the moment that one person is
not protected anymore stealing money in Russia, and having them
also protected in the United States or in Europe, on the rule
of law, the whole system will collapse. And that's why Putin
was so eager, and is spending massive resources, to repeal
Magnitsky law and prevent countries, like with open threats to
Canadian Parliament, just it's unheard. The way the Russian
Parliament and Putin himself actively trying to stop Canadians
blackballing them with all sorts of retaliations.
And as you said, it's the modern autocrats are working,
because they want to enjoy the luxuries of the world that they
are fighting with, for propaganda purposes. And that's why
they're far more vulnerable than the Communist regime. And I've
been saying for a long time, use not tanks but banks. And they
found a way of corrupting Western financial, political, and
business circles, by doing it for years. And we have to give
Putin credit for just being quite savvy in just finding the
soft spots.
And finally, I could say that for those who have been
arguing about his openness, saying, oh, if we have this
engagement it will help to sort of lift Russian standards to
the world's accepted rules and laws and regulations. Actually,
it works the other way around. It's not that Russia upgraded
its rules and regulations, but it corrupted the free world that
was absolutely open and defenseless against the flood of these
hundreds of billions of dollars of money stolen in Russia. And
I believe the system has been in place for many other
authoritarian regimes that followed Putin's model.
Mr. Whitehouse. Mr. Cotler, final thoughts to add?
Mr. Cotler. Yes, Senator. I appreciate your
characterization of the clash of civilizations in terms of the
rule of law, and the autocracy, kleptocracy, and criminality,
and that it's a strategic imperative at this point to combat
them. I want to say that I think this is being enhanced, both
the threat and the imperative; by this resurgent global
authoritarianism; by the illiberal populism; and by something
we haven't spoken of, but I think is becoming particularly
worrisome, and that's of democracies in retreat or the idea of
democracy, the institutions of democracy being increasingly
questioned even in democratic countries, aided and augmented by
the post-truth universe.
And so I just want to bring to your attention something
that I think you know but maybe should be part of our overall
internationalization of advocacy, and that is, recently in
Prague, in October--under the auspices of Prague 2000, which
are sort of the heirs of Vaclav Havel's intellectual and moral
initiatives--Europeans and Americans and others gathered
together to launch the Prague Declaration [sic; Appeal] for
Democratic Renewal, and this Prague declaration seeks to
address, in a way, what you have been speaking of, Senator, and
seeks to mobilize democracies, at this point, in a coalition
for democratic renewal in order to reaffirm the values, the
ideas, the institutions of democracy in democratic countries.
And I think this is something that we may be able to factor
into our work here with regard to the Helsinki Final Act,
Justice for Sergei Magnitsky case and cause and the like.
Mr. Whitehouse. Well, thank you for your leadership.
I've taken a lot of time, Mr. Chairman. Let me just, in
closing, thank not only you and the Helsinki Commission for the
work that is being done in this area, but I want to recognize
the Center for Strategic and International Studies and the
Kremlin Playbook document that they put together under the
leadership of Heather Conley. I want to recognize the Atlantic
Council's work and the Kremlin Trojan Horse document that they
put together. I want to recognize the Hudson Institute, whose
Kleptocracy Initiative is doing powerful work in this area. So
there are a number of important voices that are joining
together, and I hope we can take advantage of that broad
support to continue to take action against the imperiling cabal
of kleptocracy, autocracy, and crime that is a strategic threat
to our country.
Thank you, Chairman.
Mr. Wicker. Thank you for that very valuable line of
questioning, Senator Whitehouse, and let me just follow up--and
it may be that Senator Whitehouse is aware of this or not--
there's a man named Paul Ostling, a former COO of Ernst &
Young, who blew the whistle on a company in Russia that had
powerful friends in the Kremlin. The Russians are now using the
American legal system to commence litigation against Mr.
Ostling, a process which has substantially depleted his own
fortunes.
I don't know if any of you are familiar with this, but I am
convinced that that is actually happening. So this would be a
case in which American law firms are being hired by Russians to
harass people who legitimately came forward and blew the
whistle, much as you did, Mr. Browder, and much as Sergei
Magnitsky did.
Are any of you aware of this, and is this happening writ
large, or was it only to an isolated few like Mr. Ostling?
Mr. Browder. I haven't heard the story, but I just wrote
down his name so I can do some research, but more generally,
Putin interferes using our freedom of the press, he interferes
using democracy, he interferes using the internet, and he also
interferes abusing legal processes--we've talked about Interpol
and so on--but they also interfere very aggressively using
American law firms.
And Senator Whitehouse, no offense to lawyers, but there
are a lot of sleazy lawyers who are actively making huge
amounts of money--American lawyers ripping human rights
activists and others limb from limb using the American legal
process. And I've been on the other side of this where I had a
lawyer who worked for me helping to track down the stolen money
from the Magnitsky crime. His name was John Moscow, a former
prosecutor from BakerHostetler law firm, and we then found the
money, presented it to the Department of Justice, and he
switched sides and then started from representing the victims
to representing the perpetrators to make tens of millions of
dollars. He was disqualified by the Second Circuit after a year
and half, but he was ready to basically throw out his entire
integrity as a lawyer to work for the Russian Government to
terrorize a whistleblower that he helped. So there's a lot of
bad guys out there doing this stuff. I'm going to look into Mr.
Ostling because I think that sounds like an important story.
Mr. Wicker. Mr. Cotler, are the signatories to the Prague
declaration current members of the government or former members
of the governing majority?
Mr. Cotler. The signatories to the Prague declaration
include both present and former parliamentarians----
Mr. Wicker. So it's bipartisan.
Mr. Cotler. It's utterly bipartisan. I might add that the
National Endowment for Democracy here, under the leadership of
Carl Gershman, was very much engaged in the drafting of the
Prague declaration, and you've got congresspeople, senators,
Canadian parliamentarians, Europeans, artists, intellectuals,
et cetera. It's an attempt to mobilize a movement of an
international character for the renewal of democracy and for
the revival of the import and impact of the democratic idea.
Mr. Wicker. Thank you.
Mr. Kasparov, Natan Sharansky once said, a country that
does not respect the rights of its own people will not respect
the rights of its neighbors. And, in essence, we're all
neighbors in this global economy we have.
So I would ask you, in that regard, what's it to somebody
in Providence, Rhode Island, or Tupelo, Mississippi, or
Milwaukee, Wisconsin, that we're so interested in this
Magnitsky List? Why should someone in Memphis approve of us
shining the light of day on this issue? What's their stake in
this?
Mr. Kasparov. By the way, I'm one of the signatories of
Prague's declaration, so--[laughs]--that was mentioned.
Mr. Wicker. I think it enhances the declaration.
Mr. Kasparov. Yes, yes. It goes back to my statement--and
I've been saying it for many years, and Boris Nemtsov and many
others repeated it as well--that Putin was our problem but
eventually it would be everybody's problem. And Putin has no
other choice but to create chaos, spread chaos. Russian economy
is not in good shape, and he doesn't believe it will ever offer
him an excuse for staying in power indefinitely.
So if you listen to Russian talk shows, you will not hear
anything about Russia. It's all about Ukraine, Syria, of course
United States. It is 24/7 anti-American bashing because America
is enemy that Putin wants to oppose, even virtually, to show
his strengths, to expose the aura of invincibility. And, for
him, meddling in American election was just part of the game.
He will never stop doing that because he has nothing else to
offer to people in Russia.
His domestic propaganda is filled with his geopolitical
adventures, and if you think that he will leave you alone, no,
because he has to prove every day that he is invincible. That's
the rule of the mafia. The moment he looks weak, he will be
challenged, and Putin instinctively knows this rule, so he
cannot project any weakness, and the best way to pretend he is
strong is to defy the biggest power in the world.
And these latest interferences just demonstrate it--not
only in America, in Europe as well--that he would do it, and he
will always look for soft spots. He is a great opportunist. He
saw opportunity in Syria, he went on, and he just carpet-bombed
Aleppo, pushing refugees in Europe to create political crisis
there and help alt-right that always wanted to leave sanctions.
So he's looking at this big map as an opportunity to spread
chaos.
And for those who think that you can find common ground
with him, you're wrong. And Putin, he's at a point where he
will be looking for more conflicts, and because he is the KGB
guy and also Judo expert, he looks for an opportunity to use
the strengths of the free world against the free world itself,
so that's why he looks for the pillars of the free world, like
innovations, technology, rule of law, as an element of his
hybrid war against the free world, which gives him a purpose of
staying in power forever.
Mr. Wicker. I think the people who would like to have
avoided this kleptocracy and all of the bad things in Senator
Whitehouse's thesis, I think we missed a real opportunity in
the early 1980s. That's my conclusion.
Give us some hope, Mr. Kasparov--and I'll let you go first,
and then others, also. Is there a generation out there waiting
inside Russia to do right by the Russian people? Give us some
hope that we're headed somewhere to a better place. I realize
you are only 32 years old.
Mr. Kasparov. I'm an acute optimist by nature, though I
have to live in exile for almost five years. From history books
I know that every dictatorship comes to an end, and the Putin-
like dictatorship is very vulnerable to geopolitical defeat. I
could remind people about the orderly retreat of Soviet troops
from Afghanistan in 1989. It was nothing like American stampede
in Saigon, but the very picture of Russian troops retreating--
Soviet troops--in February 1989 sent a very powerful signal to
Eastern Europe and to the former Soviet republics that empire
are no longer all powerful, it's weakening. And by the end of
the year, the Soviet Empire in Eastern Europe collapsed; in
less than three years after the retreat from Afghanistan, the
Soviet Union ceased to exist.
I think that what we saw in the last year, thanks to Alexei
Navalny and his efforts of bringing young people to the
streets, there's a generation that is not happy, but nobody
will challenge dictator and dictatorship if it looks strong.
You need just to create image of weaknesses, and the moment it
happens, I believe the change could be all of a sudden.
I've no idea how and when Putin's regime will collapse, and
that's bad news. The good news: Putin also doesn't know it as
well.
Mr. Wicker. Mr. Whitehouse, I think what I'd like to do is
give each member of the panel, starting with Mr. Cotler, an
opportunity to take a moment or two and summarize. But before
that, if you have other questions, I'd recognize you for
another round.
Mr. Whitehouse. No, thank you. I'd be delighted to hear the
closing statements.
The only thing that I would do is take advantage of your
generosity to read two sentences from our own Helsinki
Commission report, ``Corruption in Russia: An Overview.'' One
says: ``To avoid sanctions, Putin's cronies take advantage of
the secrecy provided by Western offshore havens to secure
stolen funds abroad.'' That is what we are talking about, and
clearly, one of the offshore havens--in fact, unfortunately a
growing offshore haven--is our own country now.
And second: ``Any anti-corruption measures implemented in
the West undermine Putin's kleptocracy.'' End quote. So not
only are we, to some degree, sowing the seeds of our own
destruction by providing secrecy for these international
criminals, but we very much have it within our power to unwind
that by taking anti-corruption measures, to quote our own
report, ``implemented in the West.''
So I applaud the work that the Helsinki Commission staff
have done on that report. I wanted to highlight those
particular points. I thank you for this hearing, and I am eager
to hear the closing remarks of our witnesses.
Mr. Wicker. Let's just ask Mr. Cotler to take a moment or
two and make any points that haven't been made, or respond to
anything that needs to be nailed down.
Mr. Cotler. Well, Mr. Chairman, I might just respond to
your words in terms of the Russian generation today. I think
that they are legatees of great leaders, of whom Andrei
Sakharov was the father of the modern dissident movement, and
his words, as he put it, ``I do not know what will help the
cause of human rights. I do know that it will not be helped by
silence.'' Just as Elie Wiesel, great Nobel Peace laureate,
said that the real danger is silence in the face of evil, and
that it's our responsibility, wherever we are, to speak out and
act against injustice. And that's what the Helsinki Final Act
was intended to do, that's what Justice for Sergei Magnitsky
legislation was intended to do.
And your remarks with regard to Sharansky--I happen to have
had the great fortune to have acted as counsel for Anatoly
Sharansky when he was in the Soviet Union. We'd become very
close friends. But I think his own voyage is very interesting
in terms of an inspirational voyage.
Sharansky was one of the three founders of the Helsinki
monitoring groups in the former Soviet Union. It was those
monitoring groups, founded under the Helsinki Final Act--the
right to know and act upon one's rights--that helped bring
about, if I can use a Marxist metaphor, the withering away of
the former Soviet Union. They demonstrated how a few small
people can transform the world. I think that sends a message to
young people in Russia, but also to people here in the United
States and Canada, wherever they may be, that acting together
in concert on behalf of a just cause can, in fact, change the
world.
And I will close by saying that Vladimir Kara-Murza, when
he testified before us and said that he believes that the
younger generation in Russia will demonstrate that, if given
the support of the international community in terms of
combatting the cultures of criminality and corruption and
impunity so that they can give expression to their ideals,
they, too, can do what the Sharanskys did and change the
universe. And it may be that Putin's Russia, in not too long,
will also wither away as did previous totalitarian regimes. But
we have to play our part in seriously and internationally
combatting this resurgent global authoritarianism and the
cultures of criminality, corruption and, in particular, the
impunity that underpins it.
Mr. Wicker. Mr. Kasparov.
Mr. Kasparov. Very quickly--so I think that Magnitsky's Act
gives this country and American allies around the world a
unique opportunity to demonstrate its support for Russian
people, to make a clear distinction between the criminal regime
that is running Russia today, and looting Russian resources,
and parking money in the world under the pretext of rule of
law. It brings back the memories of very strong language used
by Ronald Reagan condemning communist crimes, but always
emphasizing that it's not about the people of the Soviet Union,
who were also victims of totalitarian regime.
I think just making this clear distinction and also sending
a message that the money, this loot that is being parked in the
free world, will be eventually returned to Russia to help
Russian people to rebuild the country after the collapse of
Putin's criminal enterprise. That will be very important, and
hopefully it will change the mood, if not of all Russians, but
many young people that will recognize that America and the free
world is not fighting Russia, as Putin is trying to pretend,
but fighting the criminals who are hurting Russia as much as
the rest of the world.
Mr. Wicker. Thank you.
Mr. Browder.
Mr. Browder. So why is Putin so mad at this? Why is he mad
at me? Why is he mad at you? Why is he mad at this concept of
Magnitsky Act, Magnitsky sanctions? He's mad because, although
Washington is not the center of innovation and technology, you
and your colleagues have come up with a new technology for
dealing with human rights abuse here in Washington. You've been
the big innovators. And you found the Achilles' heel of the
Putin regime.
As Garry has said, as Vladimir Kara-Murza has said, as
Boris Nemtsov has said--the Soviet Politburo didn't go on
vacation to St. Tropez and South Beach, but the people from the
Putin regime do, and we figured out their Achilles' heel, and
we know it. And we should use it, and we should use it
aggressively, and we should use it going forward, and we
shouldn't be shy about using it.
Thank you for doing this today.
Mr. Wicker. And thanks to all three members of the panel
and to the members of the Commission who were here today, and
this hearing is now closed.
[Whereupon, at 11:23 a.m., the hearing ended.]
A P P E N D I C E S
=======================================================================
Prepared Statements
----------
Prepared Statement of Hon. Roger Wicker, Chairman, Commission on
Security and Cooperation in Europe
The Commission will come to order. Good morning. Welcome
to today's hearing on ``The Magnitsky Act at Five Years:
Assessing Accomplishments and Challenges.''
Before we begin today, I want to recognize Ambassador David
Killion, the Helsinki Commission Chief of Staff, who is
retiring at the end of this month after 23 years of Federal
Service. Senator Cardin and I joined together to appoint
Ambassador Killion to direct the Commission at a key moment--
shortly after Russia's invasion of Crimea in 2014.
Since then, Ambassador Killion's leadership has contributed
greatly to enhancing the stature and the impact of our
Commission as it develops U.S. policy responses to critical
security threats in the OSCE region. With his considerable
diplomatic skills, he has also managed to keep our Commission
unified, enabling us to speak with a strong voice when
necessary on issues such as Russia's violation of its Helsinki
commitments. In addition, Ambassador Killion has extended
Commission leadership to new and critically relevant policy
areas, such as the effort to combat kleptocracy. As such, this
hearing is a perfect capstone to Ambassador Killion's work for
us. Ambassador, thank you for your public service.
This is the Commission's final hearing in 2017, and I
cannot think of a more fitting way to end the year than to
revisit one of the signature pieces of legislation that has
come out of the Helsinki Commission.
The Magnitsky Act was drafted to hold accountable the
Russians who were responsible for the torture and murder of tax
attorney Sergei Magnitsky in 2012. Why was the Helsinki
Commission concerned with this particular crime?
The mandate of the Helsinki Commission requires us to
``monitor the acts of the signatories which reflect compliance
with or violation of the articles of the Final Act of the
Conference on Security and Cooperation in Europe,'' also known
as the Helsinki Final Act. Those articles deal with commitments
in three major areas, or ``baskets''--security, economics, and
the human dimension.
The case that ended with Sergei Magnitsky's tragic death
concerned major violations in two of those three ``baskets''--
massive corruption in Russia, which the OSCE attempts to deal
with through economic measures, and the egregious human rights
violations involved in the unspeakable treatment of Sergei
Magnitsky.
The five years that have elapsed since the passage of the
Magnitsky Act--and the eight years that have elapsed since
Sergei Magnitsky's murder--have certainly shown that our
concern with Russia's unchecked corruption and wanton disregard
for human rights was well founded. In that time corruption has
continued to eat away at the fabric of Russian society,
enabling further misbehavior both within and beyond Russia's
borders. The state at this point can truly be described as a
kleptocracy, where Putin rules with the help of a group of
cronies whose loyalty is guaranteed by transfers of wealth
stolen from the Russian people.
Russia has violated the territorial integrity of a European
State and interfered in the elections of a number of OSCE
participating states, including the United States. And, of
course, Russian citizens continue to suffer from the predations
of their own government on a daily basis. Russian opposition
politician Boris Nemtsov, who was himself murdered in 2015
within sight of the Kremlin walls, deemed the Magnitsky Act
``the most `pro- Russia' law--for justice.'' We do sincerely
hope that the Magnitsky Act will one day lead to justice--not
only for Sergei Magnitsky and his family and friends, but also
for all Russians who suffer violations of their universal
rights by a state that believes it is accountable to no one.
We have three remarkable witnesses to speak to us today
about what the Magnitsky Act has accomplished, as well as what
still needs to be done to encourage Russia to respect the
rights of its citizens and live up to its OSCE commitments.
We will hear first from William Browder, the CEO of
Hermitage Capital, the firm that was plundered to the tune of
$230 million in a massive tax evasion scheme by Russian
authorities. Mr. Browder has worked tirelessly for the past
eight years, at great risk to his own safety, to bring those
responsible for Sergei Magnitsky's murder to justice. I
strongly encourage any of you who have not read his book ``Red
Notice'' to pick up a copy and do so. It is a gripping and
unforgettable account of massive corruption, torture, murder,
and impunity.
After that, Garry Kasparov will provide us with a broader
view, addressing the full scope of corruption and human rights
violations in Russia. Mr. Kasparov is well known to most of us
as one of the greatest chess players in history, becoming the
youngest world champion ever at age 22 in 1985. After 20 years
at the top of the chess world, he gave it up and joined the
fledgling Russian pro-
democracy movement in 2005. He participated, along with Boris
Nemtsov, in the May 2012 Bolotnaya Square demonstrations, one
of the biggest protests held in Russia since the 1990s. The
Bolotnaya Square protests were followed by an extensive
crackdown that forced him to leave the country and relocate to
New York. Mr. Kasparov is the chairman of the New York-based
Human Rights Foundation, and he has also found the time to
write a book entitled ``Winter Is Coming: Why Putin and the
Enemies of the Free World Must Be Stopped.'' Although I have
not had an opportunity to read the book in its entirety, I
certainly agree with its premise: The free world needs to stand
up to the threat that Russia poses to core Helsinki Act
principles. I believe this is the first time we have ever had a
world chess champion testify at a Helsinki Commission hearing,
and we are very much looking forward to hearing what Mr.
Kasparov has to say.
Finally, the Honorable Professor Irwin Cotler will testify
about his work to pass a Canadian version of the Magnitsky Act.
The pressure from Russia on Mr. Cotler and other Canadian
backers of that bill has been immense--just as it has been in
every other country that has considered passing a version of
the Magnitsky Act. Professor Cotler has a distinguished career
in advancing human rights around the world, not only as
Canada's Attorney General and Justice Minister, but also as the
founder and chair of the Raoul Wallenberg Center, an
institution dedicated to bringing together all parts of civil
society in the defense of human rights. We welcome your
thoughts on what the international community should do to
address the scourge of Russian corruption and impunity.
Again, we thank you for being here, and thank you for your
full written statements, which will be included in the record.
Prepared Statement of Hon. Chris Smith, Co-Chairman, Commission on
Security and Cooperation in Europe
Mr. Chairman, I would like to take the opportunity to thank
our distinguished guests for being with us today and marking
the fifth anniversary of the Sergei Magnitsky Rule of Law
Accountability Act.
This all began with Sergei's investigation into the brazen
theft of $230 million from the Russian people by officers of
FSB Unit K and the Interior Ministry. He continued to expose
Colonel Artem Kuznetsov and Major Pavel Karpov's plunder from
foreign investors and how they lavishly spent it, while
millions of Russians struggled to get by. For that, Kuznetsov
and Karpov illegally detained Sergei, repeatedly tortured him,
and denied him medical attention. All in the hope that they
could force Sergei to confess and absolve themselves of their
crimes. Sergei was murdered because he would never confess to
trumped up charges, and never gave into to Kuznetsov and
Karpov's brutality.
The Senate and the House passed the Sergei Magnitsky Act
five years ago to ensure that Sergei and his family got the
justice they deserved and to send a message to Russia: ``This
shall not stand.'' The identification and sanction of those
involved in all aspects of Sergei's illegal detention, torture,
and murder struck right at the heart of the Kremlin elite. It
sent an unmistakable signal that the United States of America
is prepared to sanction all those involved in human rights
abuses.
In response, President Putin took his wrath out on innocent
Russian orphans. These children, many of whom were in need of
serious medical attention, had their hopes of a loving family
and a happier life dashed--dashed because the Kremlin elite saw
harming vulnerable children as the best means to retaliate
against the United States. Nineteen children died who could
have been helped, had they been adopted and brought to the U.S.
Furthermore, Putin, still reeling from the impact of the
Magnitsky Act, lashed out at the United States, and those he
saw as responsible for the law, including myself and others in
this room. Despite having traveled to Russia many times, I was
denied a Russian visa in 2013. I had planned a trip to discuss
the impact of the Magnitsky Act inside Russia, but my
application was ignored. The Russian Ambassador gave no
explanation for my denial, but I think we all know why it
happened. Russia saw me as a threat, because the Sergei
Magnitsky Act had hurt them.
More than 40 years on from the signing of the Helsinki
Final Acts, the human rights situation in Russia continues to
deteriorate. But the Magnitsky Act wounded President Putin and
his close circle. It took away that which was most dear to the
Kremlin elite--their freedom to travel to the U.S. and to
safeguard their money in our nation. The law set the standard
around the world for other legislation that would freeze the
assets and travel of Russian human rights abusers.
I would once again like to thank the witnesses for
attending this hearing, and their dedication to exposing the
malicious and insidious nature of President Putin's regime. Mr.
Chairman, I yield my time.
Prepared Statement of William Browder, CEO, Hermitage Capital
Management
Chairman Wicker, Ranking Member Cardin, distinguished
members of the Commission, thank you for the opportunity to
share my views on the Magnitsky Act today.
When my lawyer, Sergei Magnitsky, was murdered on November
16, 2009, after uncovering massive state corruption in Russia,
it was the most heart-breaking moment of my life. Sergei had
been killed because he was my lawyer. He would still be alive
today if he hadn't worked for me.
As I began the fight for justice for Sergei, I encountered
all sorts of opposition in Russia and abroad. I could never
have imagined that day when I learned of his murder that there
would someday be a U.S. human rights law bearing his name. But
five years ago today, on December 14, 2012, the President of
the United States signed the Sergei Magnitsky Rule of Law
Accountability Act into law.
Moreover, on the day it passed, I could never have
predicted how far the Magnitsky Act would spread around the
world. Without exaggeration, it has become the most important
piece of human rights legislation passed in this century.
As I sit in front of you today, I want to underline that
the entire Magnitsky movement started right here at the
Helsinki Commission nine years ago.
In April, 2009, when Sergei Magnitsky was still alive, I
met Kyle Parker, a staff member at the Commission. I briefed
him on how Sergei had been falsely arrested and imprisoned in
retaliation for uncovering and exposing a $230 million tax
rebate fraud committed by officials of the Russian state. Upon
hearing the story, Mr. Parker recommended that I present
Sergei's case at a full Commission hearing in the summer of
2009. It was at that point that Senator Cardin became aware of
Sergei's story.
When Sergei was murdered on November 16, 2009, Senator
Cardin immediately took it upon himself to see that this
terrible injustice would not go without consequences. He worked
with Senators Wicker, McCain and Lieberman as well as the
Helsinki Commission staff, and together they introduced the
Magnitsky Act in October, 2010. Representative McGovern led the
parallel effort in the House of Representatives.
They did so at a moment when the U.S. government's policy
was to reset relations with Russia. At the time, the U.S.
Administration was firmly against antagonizing the Russian
government in any way, and based on the public feedback of the
Russian government, the Magnitsky Act would do just that.
Even though it appeared that the bill had little chance of
passage due to the president's opposition, I was overwhelmed
and touched to see so many Russian activists like the late
Boris Nemtsov, Ludmila Alexeeva and Garry Kasparov take up
Sergei's cause and publicly call for a Magnitsky Act to be
adopted. Having this public discourse was a small measure of
justice in and of itself.
It turned out that everyone's pessimism was misplaced. The
nearly biblical nature of Sergei's sacrifice took on a life of
its own and created a rare moment where morality would overcome
the cold calculations of realpolitik.
The bill came up for vote in Congress in November, 2012,
winning overwhelming bi-partisan support. It passed the House
365-43 and the Senate 92-4. It was signed into law by President
Obama on December 14, 2012.
The power of the Magnitsky Act did not stop there. Senators
Cardin, Wicker and McCain realized that they had stumbled onto
a new technology for dealing with human rights abuse. In the
past, murderous dictatorships like the Khmer Rouge didn't go on
vacation to St. Tropez and South Beach, but in today's
globalized world these kinds of dictators do. The Senators
asked, ``Why shouldn't the Magnitsky Act be applied globally?''
and in 2015 launched the Global Magnitsky Act.
Because the bill continued the Magnitsky legacy, the
Kremlin was dead set against it. In the spring and summer of
2016, the Kremlin-linked lawyer, Natalia Veselnitskaya, worked
with a team of expensive DC lobbyists, PR firms, private
investigators and other operatives, sparing no expense to try
to stop the Global Magnitsky Act or to have Sergei's name
removed from it. Thankfully, these efforts were not successful.
After the bill passed with a similar overwhelming majority
in both Houses of Congress, the president signed the Global
Magnitsky Act into law on December 23, 2016.
After this, the dominoes began to fall around the world. In
December, 2016, the Estonian Parliament passed the Estonian
Magnitsky Act by a unanimous vote of 90-0. In May, 2017, the
British Parliament passed their equivalent to the Magnitsky Act
into law, allowing the British government to seize assets of
human rights violators. In October, 2017, the Canadian
Parliament voted 277-0 in favor of a Canadian Magnitsky Act.
Then, on November 16, 2017--the eighth anniversary of Sergei's
murder--the Lithuanian Parliament passed their Magnitsky Act
71-0.
Parliaments in Ukraine, South Africa and Gibraltar are each
drafting their own Magnitsky Acts and will be considering them
in the near future. We're working with parliamentarians in
other countries to introduce similar Magnitsky legislation.
All of this started here. I could never have imagined that
a single hearing at the Helsinki Commission would have turned
into this historic global justice movement.
Critics of the Magnitsky Act claim that all it does is
antagonize Vladimir Putin and is not effective. However, the
evidence points to the contrary.
When Mikhail Khodorkovsky, the oligarch who crossed Putin
and who was imprisoned for nearly ten years, was released in
2014, he told me that after the Magnitsky Act passed there was
a noticeable improvement in the treatment of prisoners. The
guards were all terrified of being added to the Magnitsky list
themselves.
Russian judges are equally scared of being added to the
Magnitsky list. Not a month goes by without a headline from the
Russian courts where Sergei Magnitsky's name is mentioned as
other victims highlight their own abuse.
Most importantly, we know how effective the Magnitsky Act
is because of Putin's own reaction. In 2012, he publicly stated
that repealing Magnitsky-like sanctions was one of his single
largest foreign policy priorities. This led to a whole series
of efforts culminating in the now notorious meeting between
Natalia Veselnitskaya and Trump representatives at Trump Tower.
This exhaustive campaign underlines just how high a priority
this is for Putin.
For me, Putin's desire to discredit the Magnitsky Act came
at a high personal cost.
In July, 2013, shortly after the Magnitsky Act was passed,
Putin put me on trial in absentia for trumped-up tax charges
along with Sergei Magnitsky, three years after Sergei's murder.
Sergei was the first person to be tried posthumously in Russian
history. We were both found guilty and I was sentenced to nine
years in a Russian prison colony.
Even before this verdict, the Russian government applied to
Interpol for a Red Notice for my arrest. They also applied to
the British authorities to have me extradited from the U.K.
Both of those requests were refused because they were deemed to
be illegitimate and politically motivated.
But that didn't stop Putin. He was so angry that, in spite
of the previous rejection, his government re-applied to
Interpol four more times. The most recent Interpol request from
Russia came on the same day that the Magnitsky Act was signed
into law in Canada in October, 2017. This request and all
others have been rejected. In fact, after this last rejection,
Interpol has sent a notice to all member states instructing
them not to cooperate with Russia on any further attempts to
have me arrested.
Putin was no more effective in his attempts with the
British government. The Kremlin applied to U.K. law enforcement
agencies a dozen different times for mutual legal assistance
and my extradition. All of these requests have been firmly
rejected by the British government.
Even though Putin fails every time, he hasn't given up.
When the bogus tax-evasion charges went nowhere, he decided to
escalate with even more ridiculous allegations against me. The
Russian government accused me of stealing $4.8 billion of IMF
funds destined for Russia during the 1998 currency collapse;
they accused me of being an MI6 and CIA dual agent intent on
destabilizing Russia; they accused me of being a serial killer,
responsible for the murder of Russian criminals who were
involved in the $230 million tax rebate fraud; and finally they
even accused me of killing Sergei Magnitsky himself.
Putin's rage was not confined to absurd criminal
accusations. He's taken more traditional criminal approaches as
well. Kremlin agents have made multiple death threats against
me. The most serious of which came from Dmitry Medvedev, the
Russian prime minister, who told a gathering of journalists at
the World Economic Forum in Davos in 2013 that, ``It's a shame
that Sergei Magnitsky is dead and Bill Browder is alive and
running around.'' In the summer of 2015, I received a message
from a senior U.S. official that the U.S. government was aware
of efforts to organize a rendition plot to illegally kidnap me
and bring me back to Russia.
Why is Putin so invested in this? Because this goes to the
core of his kleptocratic regime. Unlike in Soviet times, today
the Kremlin does not commit crimes for ideological reasons.
They commit crimes for money. In this case, the theft of $230
million. Over the last eight years we've investigated who got
that money and found that Putin himself was a recipient of
proceeds of this crime through his closest childhood friend,
Sergei Roldugin, a famous cellist.
We have also discovered that the head of the Russian tax
office, Olga Stepanova, who authorised the illegal tax refund,
as well as two other tax officials, Olga Tsareva and Elena
Anisimova, also received proceeds from the crime.
In 2013, the U.S. Department of Justice discovered that a
company owned by Denis Katsyv, the son of the former vice-chair
of the Moscow region, where some of the cover-up of the crime
took place, was also a recipient.
This summer we discovered that a Russian/Syrian national
named Issa al-Zeydi received millions from the fraud on a
corporate account in Cyprus. Issa al-Zeydi was named by the
U.S. Treasury as a person providing material support for the
Assad regime.
At present, a dozen countries have launched criminal
investigations into the recipients and launderers of the stolen
$230 million that Sergei Magnitsky uncovered. We expect more
individuals and companies will be exposed and charged in the
future.
Putin's reaction has been so extreme because it is crimes
like this that lubricate the functioning of his kleptocracy.
In spite of enormous efforts by the Russian government,
Putin has not been successful at repealing the Magnitsky Act or
preventing it from spreading around the world.
However, there is still a lot more that needs to be done,
and this is where the Helsinki Commission can act.
First, the number of people sanctioned is woefully
inadequate. The U.S. government is in possession of evidence
linking at least 282 Russians directly to the Magnitsky case,
all of whom should be targeted under the Magnitsky Act. So far,
only 35 have been sanctioned. Every December a new Magnitsky
sanctions list is published by the U.S. Treasury. I hope this
year's list will be robust and responsive to the long backlog
of people who still should be sanctioned. I also hope that many
other cases of gross human rights abuse in Russia get the
attention they deserve.
Second, one of the key perpetrators of the crime that led
to Sergei's death, Dmitry Klyuev, appears to be running circles
around the U.S. Treasury Department, the agency that enforces
the Magnitsky Act. Klyuev was added to the Magnitsky List in
2014 but pre-emptively moved many of his assets into the names
of nominees in order to evade sanctions. We've informed the
Treasury Department about his alleged sanctions evasion but so
far the nominees remain free to manage the assets without
consequence. This is an issue that goes well beyond Klyuev.
Third, the rise of Bitcoin and cryptocurrencies will likely
create a new way around these sanctions for the Putin regime.
As of now, the Magnitsky sanctions are highly effective because
once a person is on the Magnitsky list, they become pariahs in
the international financial system. The moment a person's name
hits the U.S. Treasury sanctions list, no bank in the world
wants to do business with that person to avoid being in
violation of U.S. sanctions. Unfortunately, Bitcoin and other
anonymous cryptocurrencies allow people to bypass the financial
system and conduct financial business anonymously. This is an
issue which requires the urgent attention of the U.S. and other
Western governments in relation to Magnitsky sanctions as well
as all other sanctions programs.
Fourth, there is a provision of the Magnitsky Act which
requires the U.S. government to encourage other countries to
adopt Magnitsky Acts. I believe it should become an explicit
U.S. policy to promote the Magnitsky Act at every opportunity.
The next G7 summit will be held in June, 2018, in La
Malbaie, Quebec, Canada. This meeting would be an appropriate
moment for the U.S. and its partners to advocate for the
remaining G7 countries that do not have Magnitsky Acts--
Germany, France, Japan and Italy--to adopt their own as soon as
possible. More broadly, the U.S. should use its position at the
OSCE and the U.N. to further advocate for Magnitsky sanctions
around the world.
In conclusion, I'd like to thank the Helsinki Commission
for its historic work on the Magnitsky movement and encourage
the Commission to double down given the momentum and success of
this legislation.
Prepared Statement of Garry Kasparov, Chairman, Human Rights Foundation
Thank you for having me here today, and to Chairman Wicker
and Co-Chairman Smith for holding this hearing on a topic of
vital national and international security.
I will understand if few of you recall that I spoke here
over thirteen years ago, in May 2004, on a panel titled ``Human
Rights in Putin's Russia.'' Bill Browder and I were still
attempting to do our part to salvage democracy and the rule of
law from inside Putin's Russia while the entire democratic
world preferred to ignore the true nature of what Putin was
doing in my country.
Mikhail Khodorkovsky had just been arrested. There were
still a dwindling handful of Russian media not under Kremlin
control. The Russian parliament still had a few members who
would occasionally criticize Putin. Anna Politkovskaya and
Boris Nemtsov, Sergei Magnitsky, and so many others who opposed
Putin were all still alive.
I am not the sort of person to wallow in nostalgia, but it
is hard not to think of how different Russia and the world
might be today had the free world taken a stand against
Vladimir Putin back then, before he had consolidated total
power in Russia. In 2004 Putin still needed friends on the
international stage, and he had them. By 2012 that phase was
over, and a far deadlier phase of dictatorship began, when
Putin needed not friends, but enemies to justify his eternal
grip on power. Today, there is no longer any need to discuss
human rights in Putin's Russia. They are gone, and Putin is
revealed to all as what we warned he could become: a dictator.
And please, do not speak of Putin's supposed popularity. A
popular leader does not need to fake elections, or destroy the
free media, or jail critics or kill opposition leaders. Status
that is artificially fashioned by twenty-four-hour propaganda,
repression of all dissent, and the elimination of all rivals is
not approval, it is dictatorship. Here, thirteen years ago, I
said, ``Without Western attention and pressure, the situation
will only worsen during Putin's next four years.'' We still
dreamed that Putin could be forced to hold real elections in
2008, but it was not to be. Later I said, ``Putin is a Russian
problem, for Russians to deal with. But if he isn't stopped, he
will soon be a regional problem--and after that he will be
everyone's problem.''
Fast-forward to 2006, and the murder of Russian anti-Putin
whistleblower Alexander Litvinenko in London with a nuclear
isotope. To 2008, and Putin's invasion of Georgia--for which he
also suffered no consequences and was even rewarded with the
infamous American ``Reset.'' Jump to 2012, and Putin's broad
crackdown against any and all opposition and demonstrations,
which led to Boris Nemtsov's murder and my own exile. To 2014,
and Putin's invasion of Crimea and Eastern Ukraine. To 2016,
and direct Russian interference in the American presidential
election--after similar activities in the UK, Netherlands, and
elsewhere in Europe.
For a decade now, many of us familiar with the reality of
Putin and his regime, including both of my fellow guests here
to offer testimony, have insisted that the only effective way
to pressure Putin is to target the only thing he cares about:
his hold on power in Russia. And that the best way to target
Putin's power is to take aim at his agents and cronies and
their money, to pursue the mafia that holds the levers of power
and who benefit the most from Putin's rule. The individuals who
can influence Putin must be targeted or there can be no
effective deterrence. There is no national Russian interest
Putin cares about beyond propaganda value. In fact, Russian
national interest and Putin's interests are diametrically
opposed in nearly every way. Putin does not care about the
Russian people, the Russian economy, or the image of Russia
abroad. I repeat: he does not care. This is why legislation
that targets Putin and his mafia is pro-Russia, not anti-
Russia.
But I know that first and foremost we are here to discuss
the interests of the United States. Its security, integrity,
and economic well-being. Consider the American and other free
world policy goals of dealing with Putin's aggression. One, to
improve American and international security by deterring him
from further hostile acts. Ukraine, Syria, Venezuela, missile
tech to North Korea, election meddling--Putin's attacks are
asymmetric and so the global response must be asymmetric as
well--by going after what matters to him most. Two, to threaten
Putin's grasp on total power in Russia by forcing his elites to
choose between loyalty to him and their fortunes abroad. Three,
to support the long-term interests of the Russian people by
exposing the corruption of our rulers. To all three of these
goals, the Magnitsky Act is the answer.
Putin's regime is a mafia and you have to fight it like a
mafia. Very strong penalties must be ready and widely known. I
understand that deterrence is difficult because its fruits are
not apparent. If it works, maybe nothing visible happens. To
those who say that sanctions have not worked, can you say what
else Putin might have done without them in place? Or why he
works so frantically to have them repealed?
Progress in a hybrid war is not measured in territory
conquered or battlefield casualties. Corrupting influence and
propaganda spread like a contagious disease. You can measure
the effectiveness of the Magnitsky legislation the way you
measure the effectiveness of antibiotics. You put a drop in the
petri dish and see if the bacteria stop growing, if the
bacteria respond to the antibiotic and die. By this measure,
the Magnitsky Act has been effective, and could be much more
effective if strengthened and implemented globally and
aggressively.
Last month, a Reuters report said anxiety was spreading
among Russia's wealthiest because of sanctions and the threat
of the U.S. blacklist. It reported that some business leaders
were trying to avoid being seen in public near Putin, and to
distance themselves. This is progress; it shows the medicine is
effective. But anxiety is not enough to turn against a brutal
dictator. Avoiding photo ops is not enough to bring down a
mafia. It is essential to increase the pressure, to continue
with what works now that the right path has been confirmed.
There is no other method.
Putin's weapons of hybrid war can only be defended against
at great difficulty and expense. Misinformation, cyberwarfare,
and other methods are cheap and easy to deploy, and--take it
from a pretty good chessplayer--playing only defense is always
a losing game. The answer is deterrence. Putin and his gang
must understand that, if he continues this path, their
fortunes, their families' comfortable lives abroad, will be at
risk. They aren't jihadists or ideologues, they are
billionaires who are used to profiting from dictatorship at
home while enjoying the good life in the West. End that
perverse double standard. Follow the money, the real estate,
the stock, and reveal it, freeze it, so that one day it can be
returned to the Russian people from whom it was looted, and to
help rebuild the country that has been drained for two decades.
The brittle nature of Putin's one-man dictatorship will be
exposed very quickly.
The alternative to appeasement is not war, it is
deterrence. And worrying about retaliation is absurd when Putin
will continue to escalate anyway, as long as he thinks he can
get away with it. The best way to avoid an escalating conflict
is to convince your opponent that he will lose. And make no
mistake, there is a war going on whether you want to admit it
or not. It is very easy to lose a war that you refuse to
acknowledge even exists. Engagement has failed because Putin
was never your friend. There is no common ground. Now he has
revealed his true colors as a sworn enemy of the free world.
And time is of the essence.
Thank you.
About Garry Kasparov--Garry Kasparov is widely regarded as the
greatest chessplayer in history, becoming the youngest world
champion ever at 22 in 1985. He retired in 2005 to become a
leader of the Russian pro-democracy movement against the rising
dictatorship of Vladimir Putin. He is the chairman of the New
York-based Human Rights Foundation and is a powerful voice for
individual freedom worldwide. In 2015, he wrote the prescient
book ``Winter Is Coming: Why Putin and the Enemies of the Free
World Must Be Stopped.'' His latest is ``Deep Thinking: Where
Machine Intelligence Ends and Human Creativity Begins'' (2017).
For further information: Mig Greengard, senior aide to Garry
Kasparov [email protected] [email protected]
+1 917.495.9460
Prepared Statement of Irwin Cotler, PC, OC, Chair, Raoul Wallenberg
Center for Human Rights
I am delighted to participate in the common cause which
brings us together--the struggle against the cultures of
criminality and corruption and the impunity that underpins
them--and this as part of the larger pursuit of justice and
accountability both domestically and internationally.
We meet at an important moment of remembrance and reminder:
LThe 8th anniversary of the torture and murder of
Sergei Magnitsky--who uncovered the largest corporate tax fraud
in Russian history and paid for it with his life--and where in
a move that would make Kafka blush, the Russians engaged in a
posthumous prosecution of Magnitsky for the very fraud that he
had exposed.
LThe 5th anniversary of the adoption here in the U.S.
of the Sergei Magnitsky Rule of Law Accountability Act, which
inspired similar initiatives elsewhere.
LThe immediate aftermath of the unanimous adoption by
both houses of the Canadian Parliament of Global Justice for
Sergei Magnitsky legislation, titled ``Justice for Victims of
Corrupt Foreign Officials Act.''
Accordingly, what I would like to do is first, summarize
briefly the process in Canada--as a matter of chronology and
content--that led to this historic, albeit belated, Canadian
initiative; Second, summarize the raison d'etre of this
legislation; and finally some brief comments and where do we go
from here, in Canada and internationally.
First, having regard to the genesis and development of the
Magnitsky process, it was inspired, not unlike the U.S., by an
encounter I had with Bill Browder in 2010 in the UK, and which
led to the launch of the Justice for Sergei Magnitsky movement
in Canada. A series of initiatives in November 2010 alone
provide a looking glass into the character and content of the
movement, which included:
LMeeting of the Foreign Affairs Subcommittee on
International Human Rights with Bill Browder as principal
witness on November 2nd
LInternational parliamentary premiere of ``Justice for
Sergei Magnitsky'' documentary
LFirst of many Op-Eds calling for Justice for Sergei
Magnitsky and outlining the advocacy and legislative framework
to be followed
LUnanimous adoption by the Foreign Affairs
Subcommittee of my motion calling, inter alia, for justice for
Sergei Magnitsky legislation modeled on the U.S. initiative.
One year later, I introduced a private Member's Bill titled
``an Act to Condemn Corruption and Impunity in Russia in the
Case and Death of Sergei Magnitsky,'' the first legislative
initiative of its kind in the Canadian Parliament, but being
from an opposition party it required support from the
government of the day, which was not forthcoming.
In 2012, Boris Nemtsov, leading Russian democrat, came to
Canada to support this Private Member's Bill along with
Vladimir Kara-Murza, and later that year we launched the
Justice for Sergei Magnitsky Interparliamentary Group, which
led to resolutions being adopted in the European Parliament and
country adoptions in Estonia and Lithuania.
In 2013 the pattern of unanimous motions continued, but the
focus now shifted to representations to the Canadian
Government, and where Bill Browder and I joined in meetings
with Government Ministers, and where we conveyed documentary
evidence of the criminality and corruption of sixty Russian
officials, but our efforts to get Government actions were
unavailing. The year 2014 began with Canada sanctioning Russian
officials for Russian aggression re: Crimea and the Ukraine,
and with Russia retaliating by banning 13 Canadian leaders,
including MP Chrystia Freeland (who was later to become
Minister of Foreign Affairs) and myself, but still no
government legislation re: Magnitsky.
2015 witnessed a number of dramatic developments, which
began to move us in the direction of legislation.
LIn February 2015 Boris Nemtsov, leading campaigner
internationally for Justice for Sergei Magnitsky legislation
and a leading critic of Russian aggression in Crimea and
Ukraine, was murdered just outside the Kremlin.
LIn March 2015 the House unanimously adopted my motion
calling for Global Justice for Sergei Magnitsky legislation
again inspired by the developments in the U.S.
LIn June I introduced, again as a Private Member's
Bill, the Global Magnitsky Human Rights Accountability Act and
while the Conservative Government finally agreed to adopt the
legislation, the process was adjourned by the calling of an
election.
LIn the course of the election, each of the three
principal political parties, Liberals, Conservatives, and the
New Democratic Parties committed themselves to adopting such
legislation if elected.
LThe Liberal Party won the election but the momentum
of the Government was stalled. The new Foreign Minister
Stephane Dion, considering that such legislation was
unnecessary (i.e. we had other domestic legislation which would
suffice) and that it would prejudice our ``re-engagement with
Russia.''
Accordingly, we reignited the parliamentary process--now in
both Houses--and again with the witness testimony of Bill
Browder, Vladimir Kara-Murza, Zhanna Nemtsova, and Garry
Kasparov. A number of developing factors underpinned the
momentum, including:
LThe founding of the All-Party Raoul Wallenberg
Parliamentary Caucus for Human Rights, which made such
legislation a priority
LUnanimous report from the Foreign Affairs Committee
calling for Global Justice for Sergei Magnitsky legislation
LThe leadership of the newly appointed Foreign
Minister Chrystia Freeland, who in May 2017 announced
Government support for Sergei Magnitsky Global Justice and
Accountability legislation
LSuccession of Russian threats emanating both from the
Russian embassy in Canada and Putin himself warning against
Canadian adoption of that legislation and the adverse impact it
would have on Canada-Russia relations
LMeeting of the Raoul Wallenberg Caucus calling not
only for the passage of the legislation, but for its unanimous
adoption, so as to send a message to the Kremlin that we will
not be intimidated
LFinally, Global Justice for Sergei Magnitsky
legislation passes unanimously in both Houses and received
royal assent
The momentum for the legislation was not unrelated to the
resurgent global authoritarianism, which mandated a Global
Human Rights Act, because while Russia was a major human rights
violator--arguably the most threatening of the human rights
violators because of its externalized aggression and its
domestic repression--Russia was not the only human rights
violator, which accounted therefore for the objectives and
purposes which underpin this legislation and which includes:
First, to combat the persistent and pervasive culture of
corruption, criminality, and impunity.
Second, to deter thereby other would-be or prospective
violators, because if we indulge that culture of impunity, we
only embolden the human rights violators. If we sanction the
human rights violators, we can deter others because they know
there is a price to be paid for their corruption or
criminality.
Third is that we make the pursuit of international justice a
priority and a pillar of our human rights policy both domestic
and international.
The fourth is to uphold the rule of law and justice and
accountability in our own territory through visa bans and asset
seizures and the like. The recent evidence of how Magnitsky
assets have been laundered in Canada is but one case study of
the importance of having this type of comprehensive
legislation.
Fifth, this legislation does not interfere with the sovereignty
of any other country. We are not acting in any other country.
What we are seeking to do is to protect our own sovereignty,
our own rule of law, our own economy, and to exclude these
would-be perpetrators from exercising what is in effect a
privilege, and not a right, to enter our country.
Sixth, is to protect Canadian businesses operating abroad.
Magnitsky uncovered the largest corporate tax fraud in Russian
history, which was perpetrated against a U.K.-based entity,
Hermitage Capital, so this type of legislation would protect
not only the integrity of commerce in Canada, but also our
Canadian businessmen operating abroad.
Seventh, is the importance of the naming and shaming of human
rights violators, so that they cannot, in effect, leverage
their culture of criminality and corruption to come to Canada,
purchase houses here, vacation here, send their children to
schools here, launder their assets here, and the like. In other
words, we need to protect the integrity of our sovereignty, our
rule of law, our economy, and our institutions.
Eighth, it is important to appreciate that this legislation
targets human rights violators and not governments, targeting
individuals who have engaged in gross violation of
internationally recognized human rights such as extrajudicial
executions, torture, widespread and systematic targeting of
civilians, and to prevent them from entering our country or
laundering their assets here.
Ninth, such legislation would not bind the Canadian government;
rather, it would empower the Canadian government. It would
allow us to be a protector of human rights, and not an enabler
of the violators of human rights.
Finally, and most importantly, it tells the human rights
defenders, the Magnitskys of today in Russia or those in any
other part of the world, such as Raif Badawi in Saudi Arabia or
Leopoldo Lopez in Venezuela or the Baha'i in Iran, that they
are not alone, that we stand in solidarity with them, that we
will not relent in our pursuit of justice for them, and that we
will undertake our international responsibilities in the
pursuit of justice and in the combatting of the culture of
impunity and criminality in these respective
countries.
Where do we go from here? May I make a number of
suggestions:
First, we should seek to internationalize the Global
Justice for Sergei Magnitsky movement and secure as many
participating countries as possible. As Boris Nemtsov put it,
the adoption of Magnitsky legislation by EU countries would be
a serious blow to the criminal regime in Russia. As he put it,
``If you want to protect yourself against Putin's thieves,
murderers, and corrupt officials, you must adopt the Magnitsky
law.''
Second, three of the G7 countries have now adopted
Magnitsky legislation--the U.S., UK, Canada--as Canada assumes
the presidency of the G7--and the next G7 meeting will be held
in Quebec--we should seek to mobilize support for such
legislation in the four remaining G7 countries--Germany,
France, Italy, and Japan.
Third, we need to make the OSCE a focal point of our
advocacy for Justice for Sergei Magnitsky legislation, anchored
in our commitments under the Helsinki Final Act, where the OSCE
countries have affirmed that ``issues relating to human rights,
fundamental freedoms, democracy, and the rule of law, are of
international concern and the respect of these rights and
freeedoms constitutes one of the foundations of the
international order. Therefore we have not only a right but a
responsibility to hold Russia--an OSCE state--accountable for
the standing violation of its commitments.
Fourth, the assault on human rights and the rule of law--
and the imprisonment of human rights defenders--is a standing
violation of principle seven of the Helsinki Final Act--the
right of people to know and act upon their rights, and here
too, Russia must be held accountable re: its political
prisoners.
Fifth, from a global perspective, Global Justice for Sergei
Magnitsky legislation should combat the resurgent global
authoritarianism--and the culture of impunity that underpins
it--by sanctioning human rights violators, be they in Russia,
Venezuela, or South Sudan, which is something Canada has done
since our adoption of the legislation. In the end of the day,
in adopting Magnitsky legislation we make a statement not only
of what we must do, but of who we are.
MATERIAL FOR THE RECORD
Cover of the Canadian Parliament Foreign Affairs Committee Report,
April 2017
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