The US Senate’s backing this summer for the so-called Magnitsky Law is forcing more investors to listen to Browder’s ultra-critical view of the Russian state system. So what kind of change in Russia would Browder advocate?
The law is an important precedent for US relations with other countries too; Browder is a rare example of a hedge fund manager turned human rights advocate. His grandfather was leader of the US communist party in the 1930s.
After lobbying by Browder, the US Senate foreign relations committee approved a law to invalidate the US visas and freeze the assets of 60 Russia citizens accused of human rights violations. Browder says these people were involved in the 2008 death in custody of Sergei Magnitsky, a lawyer investigating an alleged tax fraud involving supposedly forged Hermitage documents.
Within Russia, however, the Magnitsky Bill gives weight to Browder’s grim depictions of doing business under Putin. “Russia is not an investible country,” says Browder in his office in London’s Mayfair.
Until he was unexpectedly refused entry to Russia on arrival in 2005, Hermitage was one of Russia’s biggest foreign portfolio investors. Browder was one of the Russian government’s greatest advocates. Today, he is perhaps Russia’s most bitter detractor, certainly among investors.
“Some people say stock valuations in Russia are cheap, but they were cheaper when I entered [in the late 1990s]; now the risks and the criminality are greater,” he says.
Browder characterizes the Russian state as nothing more than a criminal regime. “If you think you own something valuable in Russia, the chances are someone is coming after you. You have no rights or laws to protect you as an investor.”
Browder has little patience for Kudrin’s opposition. “It’s a myth that Kudrin was a reformer,” he says. Browder says there are only two options for Russia: either the government stops stealing – or the country snaps, Libya-style.
Where Kudrin is more sceptical of the embattled opposition activist Alexei Navalny, Browder has nothing but praise: “Navalny is a rational and smart guy, and he’s got a nationalist theme, which is necessary to attract the electorate.”
Unlike Kudrin, Browder is now well and truly out of Russia. Asked where he would now invest in Russia today if he had to, Browder simply says he would short the shares of VTB, Russia’s majority state-owned and second-biggest bank. “If things go bad in Europe, they go really bad in Russia,” he says.
