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Bill Browder · The David Rubenstein Show

• 0:02
  Speaker 1: With the breakup of the Soviet Union, Russia became a
• 0:05
  Speaker 1: fertile place for many Western capitalists to invest. Perhaps the
• 0:08
  Speaker 1: most successful of them was Bill Browner, who was actually
• 0:10
  Speaker 1: the grandson of the head of the American Communist Party.
• 0:13
  Speaker 1: Bill Browner built Hermitage Capital into one of the leading
• 0:15
  Speaker 1: Western investors in Russia, but he ran afoul of the
• 0:18
  Speaker 1: Russian government and had to leave the country. I had
• 0:20
  Speaker 1: a chance to sit down with Bill Browder in Berlin
• 0:22
  Speaker 1: to talk about what he's now doing and why he's
• 0:24
  Speaker 1: trying to get assets of Russia frozen so that they
• 0:27
  Speaker 1: might be used for the reconstruction of Ukraine. So I
• 0:30
  Speaker 1: don't know if Vladimir Putin has an enemy's list, but
• 0:33
  Speaker 1: if he does, you're probably on it. How did you
• 0:36
  Speaker 1: manage to get on his enemies list?
• 0:38
  Speaker 2: Well, I'm definitely on it, high on it, perhaps even
• 0:42
  Speaker 2: the highest on it among foreigners. And the way I
• 0:46
  Speaker 2: got on it was a lobbied for a piece of
• 0:49
  Speaker 2: legislation called the Magniski Act is named after my Russian
• 0:53
  Speaker 2: lawyer Sergei Magnisky, who was murdered by the Putin regime
• 0:57
  Speaker 2: in Russian police custody, and the Magniski Act freezes the
• 1:01
  Speaker 2: assets and bans the visas of human rights violators from Russia.
• 1:07
  Speaker 2: And Putin is a human rights violator. He's a very
• 1:10
  Speaker 2: wealthy man, and he values his money more than human life,
• 1:13
  Speaker 2: and so the idea that Bill Browder could get his
• 1:16
  Speaker 2: money frozen was just the biggest insult ever to him.
• 1:21
  Speaker 2: And for that reason, he's been chasing me around the
• 1:23
  Speaker 2: world ever since.
• 1:25
  Speaker 1: Are you not afraid of falling off of a building somewhere,
• 1:30
  Speaker 1: or have being poisoned?
• 1:31
  Speaker 2: All sorts of terrible things have happened to people around
• 1:34
  Speaker 2: me in this whole conflict. Do I live my life
• 1:37
  Speaker 2: in fear every day? The answer is no. Do I
• 1:41
  Speaker 2: understand that there is a very real chance they could
• 1:43
  Speaker 2: do something terrible to me? And the answer is yes,
• 1:46
  Speaker 2: Do I take precautions? Many So this is Yevgeny Pregosion.
• 1:51
  Speaker 2: He was the head of the Wagner group. He marched
• 1:53
  Speaker 2: on Moscow. He humiliated Putin, and Putin waited like three
• 1:56
  Speaker 2: or four months to kill him, And in fact, every
• 2:00
  Speaker 2: day during that three or four months, everyone was saying,
• 2:01
  Speaker 2: how is this guy still alive? And then one day
• 2:04
  Speaker 2: he was on his private jet with his entire senior
• 2:07
  Speaker 2: team of mercenaries. They're flying from Saint Petersburg to Moscow
• 2:12
  Speaker 2: and one of the wings exploded on their private jet,
• 2:16
  Speaker 2: and it just so happened that there was somebody on
• 2:17
  Speaker 2: the ground with their Apple iPhone watching this plane careening
• 2:21
  Speaker 2: to the ground. And this had two effects. One was
• 2:26
  Speaker 2: that he killed this guy who humiliated him, which is
• 2:29
  Speaker 2: a very important part of Putin's thing. But the second
• 2:31
  Speaker 2: is they had this video, and they showed this video
• 2:34
  Speaker 2: on Russian national TV and all over the world.
• 2:37
  Speaker 1: During President Trump's first term, President Trump met with mister
• 2:42
  Speaker 1: Putin at one point, and mister Putin, as I understand it,
• 2:45
  Speaker 1: said I'd like to get some things back from the
• 2:49
  Speaker 1: United States, specific that I'd like to have Bill Browder
• 2:52
  Speaker 1: brought back to Russia so that I can make sure
• 2:55
  Speaker 1: he's properly treated in Russia on their our justice system.
• 2:59
  Speaker 1: Where you surprise is that President Trump said, well, let
• 3:02
  Speaker 1: me think about it for a couple of days. And
• 3:04
  Speaker 1: were you surprised during that period of time that more
• 3:06
  Speaker 1: people didn't jump up and down and say this is
• 3:08
  Speaker 1: outrageous that the president we even consider doing this.
• 3:11
  Speaker 2: It was a pretty trying week of my life, so
• 3:14
  Speaker 2: This was July twenty eighteen. The two presidents met at
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  Speaker 2: the Helsinki Summit. It was the monday after Robert Muller,
• 3:22
  Speaker 2: the special prosecutor, had indicted twelve Russian military intelligence officers
• 3:27
  Speaker 2: for hacking the election. I've been on the top of
• 3:29
  Speaker 2: Putin's mind since the Magniski Act was passed. But what
• 3:32
  Speaker 2: was surprising was when the next question went to Trump
• 3:37
  Speaker 2: and they said, what do you think of this offer?
• 3:40
  Speaker 2: And without skipping a beat, he said, I think it's
• 3:43
  Speaker 2: an incredible offer to have the most powerful man in
• 3:45
  Speaker 2: the free world offering to hand me over to a
• 3:48
  Speaker 2: man who wants to kill me. That was very surprising.
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  Speaker 1: What did you do when you heard this? Did you
• 3:52
  Speaker 1: go into hiding or.
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  Speaker 2: I thought about getting on an airplane and leaving the
• 3:55
  Speaker 2: United States, But my wife said, well, probably not going
• 4:00
  Speaker 2: to all happen that quickly. And now the whole world
• 4:02
  Speaker 2: wants to know who is this Bill Browder, So I
• 4:04
  Speaker 2: think you should tell them. And so I spent the
• 4:06
  Speaker 2: next few days on doing interviews and explaining the whole story.
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  Speaker 2: And there actually was a lot of outrage because in Washington,
• 4:15
  Speaker 2: the big question was, you know, is do we want
• 4:18
  Speaker 2: to hand over. You know Bill Browner, who I know
• 4:22
  Speaker 2: a lot of people in Washington who helping with the
• 4:24
  Speaker 2: Magniski Act. And they had this vote in the Senate,
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  Speaker 2: and the Senate voted ninety eight to zero not to
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  Speaker 2: hand me over.
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  Speaker 1: Now, you have never met Putin, but you must have
• 4:33
  Speaker 1: studied him very carefully. Obviously. Were you surprised that he
• 4:37
  Speaker 1: decided to invade Ukraine a few years ago?
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  Speaker 2: Very surprised. So, leading up to that invasion, the Russian
• 4:45
  Speaker 2: troops all gathered on the border, and there was six
• 4:48
  Speaker 2: or eight weeks of uncertainty about whether he would or
• 4:51
  Speaker 2: wouldn't invade, And I said, no, he's just angling to
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  Speaker 2: get all concessions from the West. He's not going to
• 4:58
  Speaker 2: go in because it would be insane to go in,
• 4:59
  Speaker 2: because there'll be unbelievable sanctions. His military is totally hollowed out,
• 5:04
  Speaker 2: there's corruption. And then he went in. And so I
• 5:07
  Speaker 2: was surprised and very surprised.
• 5:09
  Speaker 1: Actually, are you surprised that it has taken this long
• 5:12
  Speaker 1: for the war to keep going on? In other words, Ukraine,
• 5:16
  Speaker 1: it was a thought at the time, will be taken
• 5:18
  Speaker 1: over in three or four days. I was Putin's plan
• 5:20
  Speaker 1: as I understand it. Obviously, the wars now on it's
• 5:23
  Speaker 1: third year or so, there's no clear resolution as we talk.
• 5:27
  Speaker 1: You see, any way, he might say I'll back out,
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  Speaker 1: but I don't really want to do this.
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  Speaker 2: Putin is never going to back down. So I was
• 5:34
  Speaker 2: surprised that the Ukrainians did as well as they did.
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  Speaker 2: At the very beginning of the war. I think that
• 5:39
  Speaker 2: everybody thought that they would lose very quickly, and the
• 5:42
  Speaker 2: Ukrainians put up such a bold and really impressive fight
• 5:47
  Speaker 2: that they pushed the Russians back once it wasn't a
• 5:51
  Speaker 2: sort of three day capitulation. And since that point, it's
• 5:54
  Speaker 2: been clear to me that there is really no end
• 5:57
  Speaker 2: to this war. And the reason there's no end to
• 5:59
  Speaker 2: this war is that the Ukrainians are not going to surrender,
• 6:03
  Speaker 2: and Putin can't back down because if he were to
• 6:05
  Speaker 2: back down, he would look weak and he would probably
• 6:09
  Speaker 2: lose power. And so for him, this war is a
• 6:12
  Speaker 2: war to stay in power, and for the Ukrainians this
• 6:14
  Speaker 2: is a war of survival. So neither side is going
• 6:16
  Speaker 2: to give up, and neither side has a definitive military advantage.
• 6:20
  Speaker 1: Are you surprised that Donald Trump, who said he could
• 6:23
  Speaker 1: probably get this war resolved within twenty four hours, has
• 6:26
  Speaker 1: not yet been able to get Putin, who he regards
• 6:29
  Speaker 1: as a friend, able to come to the negotiating table,
• 6:32
  Speaker 1: or you're not surprised.
• 6:34
  Speaker 2: I'm not surprised at all. Putin is doing this war
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  Speaker 2: in order to stay in power. He wants to stay
• 6:39
  Speaker 2: in power, to stay alive. There's nothing Donald Trump that
• 6:42
  Speaker 2: can offer him that will keep him alive and keep
• 6:45
  Speaker 2: him in power. He's doing this because he needs a
• 6:49
  Speaker 2: foreign enemy to distract the Russian people from their own problems.
• 6:53
  Speaker 2: And so there's nothing Donald Trump can do for Vladimir
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  Speaker 2: Putin that's going to make him stop.
• 6:58
  Speaker 1: Let's talk about the Browder family. How you came to
• 7:01
  Speaker 1: become an investor in Russia. Your grandfather, for those who
• 7:04
  Speaker 1: don't know, was a very prominent communist leader in the
• 7:07
  Speaker 1: United States. His name was Earl Browner. Can you tell
• 7:09
  Speaker 1: us about his background and how he came to such
• 7:12
  Speaker 1: prominence in the United States.
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  Speaker 2: So, my grandfather, Earl was a labor union organizer from Wichita, Kansas,
• 7:18
  Speaker 2: and he was so good at organizing the union that
• 7:20
  Speaker 2: one day he was spotted by the communists and they said,
• 7:24
  Speaker 2: if you like labor unionism. You're going to love communism,
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  Speaker 2: why don't you come to Russia and check it out.
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  Speaker 2: And so in nineteen twenty seven, my grandfather Earl went
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  Speaker 2: to Moscow. When he got there, he met a young
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  Speaker 2: woman who became my grandmother. My father was born in Moscow.
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  Speaker 2: And then five years later, in nineteen thirty two, they
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  Speaker 2: were sent back by the Communist Party so that my
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  Speaker 2: grandfather could become the general secretary of the American Communist Party.
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  Speaker 2: He ran for president twice against Roosevelt in nineteen thirty
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  Speaker 2: six nineteen forty on the Communist ticket. He was arrested
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  Speaker 2: in nineteen forty one, and so there was demonstrations all
• 8:03
  Speaker 2: over the inner cities of America to free year old Browner,
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  Speaker 2: and then Mayor LaGuardia called up Roosevelt and said, you
• 8:10
  Speaker 2: got to let this guy go, and he was pardoned
• 8:11
  Speaker 2: in nineteen forty two. He was eventually kicked out of
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  Speaker 2: the Communist Party in nineteen forty five for being too
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  Speaker 2: much of a capitalist, and then persecuted viciously during the
• 8:21
  Speaker 2: McCarthy era.
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  Speaker 1: So what did he do with the rest of his life?
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  Speaker 1: And did you ever meet your grandfather?
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  Speaker 2: You know, I didn't know him as a Communist leader.
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  Speaker 2: I knew him as my grandfather. He passed away when
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  Speaker 2: I was nine years old, but I remember this sort
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  Speaker 2: of amiable old man with white hair and a white mustache,
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  Speaker 2: who smoked a pipe in his office and had wise
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  Speaker 2: things to say from time to time.
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  Speaker 1: So where were you born.
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  Speaker 2: I was born in Princeton.
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  Speaker 1: And your father was at that time at Princeton or.
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  Speaker 2: He was at the Institute of Advanced Studies where Einstein
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  Speaker 2: was at the time.
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  Speaker 1: And your mother was she a mathematician or.
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  Speaker 2: She was one of the first women to go to
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  Speaker 2: MIT and they met when and my father was an
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  Speaker 2: instructor at MIT.
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  Speaker 1: And when you're nursing school and growing up, did people
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  Speaker 1: say your grandfather was a Communist or they say your
• 9:08
  Speaker 1: father is the head of the math department.
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  Speaker 2: Growing up around the university, I was the son of
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  Speaker 2: Felix Brown, or the chairman of the math department.
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  Speaker 1: So you graduated from the Universe Chicago, And then did
• 9:18
  Speaker 1: you say, I want to be in the investment world,
• 9:20
  Speaker 1: I want to go to business school. What did you
• 9:21
  Speaker 1: decide to do.
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  Speaker 2: My first job out of the University of Chicago was
• 9:25
  Speaker 2: as a consultant at Baine in company in Boston. They
• 9:28
  Speaker 2: had special postgraduate program for two years.
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  Speaker 1: So you went to Baine And how long were you
• 9:33
  Speaker 1: at Baine?
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  Speaker 2: Two years? And then I went to Stanford Business School.
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  Speaker 2: I was really on the wrong track towards something that
• 9:39
  Speaker 2: was not respected my family, to be a businessman.
• 9:42
  Speaker 1: So he graduated from Stanford Business School. Then what did
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  Speaker 1: you do?
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  Speaker 2: Well? I graduated at a very interesting time. I become
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  Speaker 2: a capitalist. And I graduated Stanford Business School in nineteen
• 9:50
  Speaker 2: eighty nine, and this is a very auspicious year because
• 9:54
  Speaker 2: this is the year that the Berlin Wall came down.
• 9:56
  Speaker 2: I'm trying to figure out what do I do with
• 9:57
  Speaker 2: my life post business school? And one day I had
• 9:59
  Speaker 2: this epiphany, which is that if my grandfather was the
• 10:01
  Speaker 2: biggest communist in America, I'm going to try to become
• 10:04
  Speaker 2: the biggest capitalist in Eastern Europe. And that's what I
• 10:07
  Speaker 2: set out to do.
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  Speaker 1: So you set up a firm called Hermitage Capital Management.
• 10:11
  Speaker 2: I end up moving to London. I have several jobs.
• 10:14
  Speaker 2: I end up at Solomon Brothers working on their Russian.
• 10:18
  Speaker 1: Desk, and then how long were you there?
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  Speaker 2: I work on the investment banking side, and my first
• 10:23
  Speaker 2: assignment was to advise a fishing fleet located in Murmansk
• 10:28
  Speaker 2: on their privatization. I go up to Murmansk. I discover
• 10:31
  Speaker 2: they have these enormous ships, four hundred feet long, just gigantic.
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  Speaker 2: And I asked the guy who runs the fishing fleet,
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  Speaker 2: how much do these things cost? Twenty million dollars? New
• 10:42
  Speaker 2: how many you have in your fleet? One hundred so
• 10:44
  Speaker 2: two billion dollars worth of ships? And I had been
• 10:47
  Speaker 2: hired to advise them on whether to exercise their legitimate
• 10:51
  Speaker 2: right under the privatization program of Russia to buy fifty
• 10:55
  Speaker 2: one percent. And I said, at what price is the
• 10:58
  Speaker 2: government selling fifty one percent? Two and a half million dollars?
• 11:03
  Speaker 2: And that was the moment I said to myself, I
• 11:05
  Speaker 2: want to be an investor in this stuff, not an
• 11:07
  Speaker 2: advisor on this stuff.
• 11:08
  Speaker 1: So you quit Salomon Brothers.
• 11:10
  Speaker 2: Actually was able to convince Solomon Brothers to invest in
• 11:13
  Speaker 2: some of these things. We made a whole bunch of money.
• 11:16
  Speaker 2: I decided to quit Solomon and do this on my own,
• 11:20
  Speaker 2: and that's when I set up Hermitage Capital Management.
• 11:23
  Speaker 1: Now, for those who don't know, are Hermitage is the
• 11:25
  Speaker 1: name of a museum in Saint Petersburg. I assume your
• 11:28
  Speaker 1: name that after that you're.
• 11:29
  Speaker 2: One of the smart ones who figured that out. But yes,
• 11:31
  Speaker 2: that's where they kept all the treasures in Russia.
• 11:34
  Speaker 1: So you set up Hermitage Capital Management. Did you have
• 11:37
  Speaker 1: any money to capitalize the business?
• 11:39
  Speaker 2: I didn't have any money at all. One person in
• 11:41
  Speaker 2: particular I developed a very close friendship with. That's a
• 11:46
  Speaker 2: man named Edmund Saffra, was the owner of republic National
• 11:49
  Speaker 2: Bank of New York, the bank that all the billionaires
• 11:52
  Speaker 2: and rich people of the time kept their money. And
• 11:54
  Speaker 2: Edmund said, I will put up the first twenty five
• 11:57
  Speaker 2: million in your fund, and if I like you, I'll
• 11:59
  Speaker 2: get my friends to invest with you. So I said, great,
• 12:03
  Speaker 2: let's do it.
• 12:04
  Speaker 1: You started investing, and I assume you did. Okay.
• 12:07
  Speaker 2: It was the most fortuitous launch of an investment fund
• 12:12
  Speaker 2: that's probably ever happened. In the first eighteen months of
• 12:17
  Speaker 2: my life as as a fund manager, we were up
• 12:21
  Speaker 2: eight hundred and sixty five percent.
• 12:23
  Speaker 1: So you were buying stakes in Russian government owned companies
• 12:26
  Speaker 1: that you could privatize and buy them at ten cents
• 12:29
  Speaker 1: on a dollar or even less a lot less.
• 12:32
  Speaker 2: So I was buying at a ninety nine point seven
• 12:34
  Speaker 2: percent discount oil companies in Russia.
• 12:38
  Speaker 1: How much did you have to manage at the peak?
• 12:40
  Speaker 2: At the peak we had about four and a half
• 12:41
  Speaker 2: billion dollars.
• 12:42
  Speaker 1: And you're investing in a discount and you're earning really
• 12:45
  Speaker 1: good profits. And how many years did you do this for?
• 12:47
  Speaker 2: I got there in spring of nineteen ninety six, and
• 12:51
  Speaker 2: it was all going all very very well. In November
• 12:54
  Speaker 2: of two thousand and five, I was coming back from
• 12:57
  Speaker 2: a business trip to London and I was stopped at
• 13:01
  Speaker 2: Schermettivo Airport and I was arrested, and I was kept
• 13:05
  Speaker 2: overnight at the airport's detention center and then deported the
• 13:08
  Speaker 2: next day and declared a threat to national security?
• 13:11
  Speaker 1: And why were you declared a threat to nation security?
• 13:14
  Speaker 2: In this time that I was investing, One of the
• 13:16
  Speaker 2: things I discovered was that the reason everything was so
• 13:19
  Speaker 2: cheap was because these companies, you might have owned a
• 13:24
  Speaker 2: share of a company, but you didn't really have a
• 13:26
  Speaker 2: share of the profits, because all the profits were being
• 13:28
  Speaker 2: stolen out the back door by the oligarchs who controlled
• 13:32
  Speaker 2: these companies. And so I started to try to figure out,
• 13:36
  Speaker 2: how do I stop these guys from stealing from the companies.
• 13:38
  Speaker 2: I was investing in. I was very good at doing research,
• 13:40
  Speaker 2: and I had a really great bunch of Russian, smart
• 13:44
  Speaker 2: Russians working for me who could figure out all the
• 13:47
  Speaker 2: stealing that was going on, and they did really beautifully.
• 13:50
  Speaker 2: And then I would take that research and I would
• 13:52
  Speaker 2: share it with the international media, with the Financial Times,
• 13:54
  Speaker 2: with the Wall Street Journal and so on. Normally, if
• 13:57
  Speaker 2: you put out some bad thing of companies doing, the
• 13:59
  Speaker 2: share price goes down. But these share prices were so
• 14:01
  Speaker 2: low that you put out their bad stuff and people
• 14:03
  Speaker 2: are saying, well, maybe they'll steal a little bit less,
• 14:05
  Speaker 2: and the share price has started to rise. Obviously, the
• 14:08
  Speaker 2: people who were on the other side of these things,
• 14:09
  Speaker 2: the people who were benefiting from these frauds that I
• 14:12
  Speaker 2: was then exposing, were getting pretty mad. And I've been
• 14:16
  Speaker 2: doing this for ten years and they finally had enough,
• 14:21
  Speaker 2: and that's what led to my exposure.
• 14:22
  Speaker 1: So you're doing this, you're making money for your investors
• 14:25
  Speaker 1: and presumably yourself as well. Putin is not happy, has
• 14:29
  Speaker 1: you arrested. And then after you're arrested in the airport
• 14:34
  Speaker 1: in Russia, they send you out of the country and
• 14:36
  Speaker 1: they say you can't come back. Is that right?
• 14:38
  Speaker 2: That's right. They could have killed me, they could have
• 14:42
  Speaker 2: imprisoned me, or they could have deported me. And this
• 14:45
  Speaker 2: was back in two thousand and five. Putin didn't have
• 14:48
  Speaker 2: the same degree of self confidence he has today. That
• 14:51
  Speaker 2: was the largest foreign investor in their country. I think
• 14:53
  Speaker 2: killing me would have been a step way too far.
• 14:56
  Speaker 1: As soon as you got out of the country, I
• 14:59
  Speaker 1: assume kissed the ground you got back in London. But
• 15:01
  Speaker 1: then you told your employees to get out the country
• 15:04
  Speaker 1: right away.
• 15:04
  Speaker 2: I called them up and said, you know, pack your
• 15:06
  Speaker 2: bags tonight and bring your families. And I got all
• 15:10
  Speaker 2: my people out. And then once they were out, I said,
• 15:13
  Speaker 2: the next thing they could do is try to steal
• 15:15
  Speaker 2: our money and we I said, we need to liquidate everything,
• 15:18
  Speaker 2: and we were able to successfully sell everything.
• 15:21
  Speaker 1: As we talk today. I think the US government has
• 15:24
  Speaker 1: not nor have the European governments agreed to do that.
• 15:27
  Speaker 1: I think the US government has been willing to use
• 15:29
  Speaker 1: the interest on that money, but the Europeans haven't quite
• 15:32
  Speaker 1: agreed to that yet.
• 15:33
  Speaker 2: So everybody's using the interests in that money. They're using
• 15:35
  Speaker 2: it for defense.
• 15:36
  Speaker 1: It's being used by the countries that are providing support
• 15:39
  Speaker 1: to Ukraine. They're using the interest off of that money.
• 15:42
  Speaker 1: It's about roughly three hundred billion dollars if there is
• 15:45
  Speaker 1: a settlement. Can you imagine that Putin would ever settle
• 15:48
  Speaker 1: and allow that three hundred billion dollars in principle not
• 15:51
  Speaker 1: to come back to Russia.
• 15:52
  Speaker 2: No, under no circumstances would you allow that. Which is
• 15:54
  Speaker 2: why we should be confiscating that.
• 15:56
  Speaker 1: Well, we have custody of that money, but the idea
• 15:59
  Speaker 1: of confiscating that is a bit of a difficult cause
• 16:02
  Speaker 1: you're working on it, but it's not easy to get
• 16:04
  Speaker 1: done right.
• 16:05
  Speaker 2: Well, everyone said the same thing about the Magniskia Act.
• 16:07
  Speaker 2: Everyone said, there's no way you're ever going to make
• 16:09
  Speaker 2: that happen. Don't even try. I'm one hundred percent sure
• 16:12
  Speaker 2: that we will get these countries to confiscate that money
• 16:15
  Speaker 2: for a very simple reason, which is it's either us
• 16:18
  Speaker 2: paying for it or it's pudent paying for it.
• 16:20
  Speaker 1: Not too long ago, there was another prominent American who
• 16:23
  Speaker 1: was something from Oklahoma who invested a fairmount in Russia
• 16:27
  Speaker 1: and he was imprisoned in Russia for some time. I
• 16:30
  Speaker 1: think he's now been freed. Is he doing anything similar
• 16:33
  Speaker 1: to what you're doing?
• 16:34
  Speaker 2: The only thing similar to me that he's done is
• 16:36
  Speaker 2: he's written a book. He wrote a book that's come
• 16:38
  Speaker 2: out recently, which I haven't read yet, but I look
• 16:40
  Speaker 2: forward to reading about his time. He actually spent some
• 16:43
  Speaker 2: time in prison, which I think was pretty unpleasant.
• 16:45
  Speaker 1: You did something that probably will be famous for more
• 16:48
  Speaker 1: than anything else you've done, which is the act we
• 16:51
  Speaker 1: talked about the Magnivskiak. Can you just explain, was Magnitsky
• 16:55
  Speaker 1: looking for something for you at the time that he
• 16:58
  Speaker 1: was in prison?
• 16:59
  Speaker 2: They said, I was kicked out of Russia in two
• 17:00
  Speaker 2: thousand and five. We liquidated everything and got our people out,
• 17:06
  Speaker 2: but except for one person, had a secretary just sitting
• 17:09
  Speaker 2: in the empty office in Moscow. And in June of
• 17:12
  Speaker 2: two thousand and seven, my office is my office in
• 17:14
  Speaker 2: Moscow was raided by twenty five police officers and they
• 17:18
  Speaker 2: seized from the law firm all the stamps, seals, and
• 17:20
  Speaker 2: certificates for our investment holding companies, the companies through which
• 17:23
  Speaker 2: we had invested all this money, which were empty at
• 17:25
  Speaker 2: this point because we'd sold everything. And the next thing
• 17:27
  Speaker 2: we know, we no longer own these investment holding companies.
• 17:33
  Speaker 2: They'd been fraudulently reregistered using the documents seized by the police. Now,
• 17:38
  Speaker 2: I had no economic stake at this point, because our
• 17:40
  Speaker 2: money was safe offshore, and so I go out and
• 17:43
  Speaker 2: hire the smartest lawyer I know in Russia at the time,
• 17:46
  Speaker 2: a young man named Sergei Magnitski is a Russian citizen
• 17:49
  Speaker 2: at the time. When I hired him to do this,
• 17:51
  Speaker 2: he was thirty five years old, and I said to Sergei,
• 17:54
  Speaker 2: help me figure this out and help me stop whatever
• 17:56
  Speaker 2: they're trying to do, because I don't feel good about this.
• 17:58
  Speaker 1: He started doing it and then he was arrested. Is
• 18:01
  Speaker 1: that right?
• 18:01
  Speaker 2: Well, so what he discovered, and this is the crux
• 18:04
  Speaker 2: of the whole story, is that the reason that they
• 18:06
  Speaker 2: stole our companies was that when I was selling everything,
• 18:10
  Speaker 2: we had a billion dollars of profit in that year
• 18:13
  Speaker 2: and we paid a tax bill to the Russian government
• 18:15
  Speaker 2: of two hundred and thirty million dollars. What Sergei had
• 18:18
  Speaker 2: figured out was that the reason they stole our companies
• 18:21
  Speaker 2: was to go back to the tax authorities and file
• 18:24
  Speaker 2: an amended tax return. And the amended tax return said
• 18:27
  Speaker 2: that these companies didn't earn a billion dollars, they earned zero,
• 18:31
  Speaker 2: and therefore they wanted the two hundred and thirty million
• 18:33
  Speaker 2: dollars of taxes that we had paid to the Russian
• 18:36
  Speaker 2: government back refunded to our companies that they had stolen.
• 18:41
  Speaker 2: Sergei discovered this crime, a theft of two hundred and
• 18:43
  Speaker 2: thirty million dollars of taxes. There wasn't our money, this
• 18:46
  Speaker 2: was the Russian government's money, and he filed criminal complaints
• 18:50
  Speaker 2: to every different law enforcement agency in Russia. He testified
• 18:53
  Speaker 2: against the officials involved, and instead of arresting the people
• 18:56
  Speaker 2: who stole the two hundred and thirty million dollars, the
• 18:59
  Speaker 2: people who stole the tun thirty million dollars organized to
• 19:02
  Speaker 2: have him arrested.
• 19:03
  Speaker 1: So one part of the Russian government is stealing from
• 19:05
  Speaker 1: another part of the Russian government in effect correct. So
• 19:08
  Speaker 1: he's arrested and he's put in jail. Does he get
• 19:11
  Speaker 1: out on bail.
• 19:12
  Speaker 2: No, They keep him in jail and then they start
• 19:14
  Speaker 2: to torture him to get him to a draw his testimony.
• 19:16
  Speaker 1: Eventually, what happened to him.
• 19:18
  Speaker 2: Well, they kept on torturing him and torturing him, pushing
• 19:21
  Speaker 2: him to try to withdraw his testimony. He just kept
• 19:23
  Speaker 2: on saying no, no, no. They put him in a cell,
• 19:27
  Speaker 2: chained him to a bed, and eight rideguards with rubber
• 19:30
  Speaker 2: batons beat him until he died.
• 19:33
  Speaker 1: When did you hear about this?
• 19:35
  Speaker 2: He was killed on November sixteenth, two thousand and nine.
• 19:39
  Speaker 2: I got the news on the morning of November seventeenth.
• 19:42
  Speaker 2: It was the most horrifying, heartbreaking, life changing news that
• 19:45
  Speaker 2: I could have ever gotten. I made a vow to
• 19:48
  Speaker 2: his memory, to his family, and to myself that I
• 19:51
  Speaker 2: was going to put aside everything else I was doing,
• 19:53
  Speaker 2: and I was going to use all my time, energy
• 19:55
  Speaker 2: and resources to go after the people who killed him.
• 19:57
  Speaker 1: So did you say to the Russian authorities arrest the
• 20:00
  Speaker 1: people that killed them? Or did you go to the
• 20:01
  Speaker 1: American authorities and say, let's pass legislation that will prevent
• 20:04
  Speaker 1: this from happening in the future.
• 20:06
  Speaker 2: Sergei had documented all the stuff leading up to the
• 20:09
  Speaker 2: night of his death in the form of four hundred
• 20:12
  Speaker 2: and fifty criminal complaints that he wrote and filed, documenting
• 20:16
  Speaker 2: every last detail of the abuse. Once a month or so,
• 20:19
  Speaker 2: he would write these out by hand. He would hand
• 20:21
  Speaker 2: them to his lawyer. His lawyer would file them, we
• 20:23
  Speaker 2: would get copies. And so the first thing I did
• 20:26
  Speaker 2: after he was killed was. I gave all that, gave
• 20:28
  Speaker 2: this information to one of the opposition newspapers in Russia
• 20:32
  Speaker 2: and they published it, and it was created a huge
• 20:34
  Speaker 2: stir because people were shocked that most people in Russia
• 20:37
  Speaker 2: didn't know that there was this whole sort of Stalin
• 20:40
  Speaker 2: like thing going on. And we thought that that would
• 20:43
  Speaker 2: kind of jolt the Russians into at least prosecuting the
• 20:47
  Speaker 2: low level people, not the instigators. But that didn't happen
• 20:51
  Speaker 2: at all. There was a total conspiracy of cover up
• 20:56
  Speaker 2: and every different branch of the Russian government.
• 20:58
  Speaker 1: So the Russian government did nothing. You event decided to
• 21:00
  Speaker 1: try to do something in the United States. What was that?
• 21:03
  Speaker 2: And so I went to Washington and I shared the
• 21:06
  Speaker 2: story of Sergei Magnitski with two senators, a Democrat from Maryland,
• 21:11
  Speaker 2: Senator Benjamin Carden and Republican from Arizona, the late John McCain.
• 21:17
  Speaker 2: And I told them the story of what happened to Sergei,
• 21:19
  Speaker 2: and I said, can we freeze their assets and ban
• 21:22
  Speaker 2: their visas? And these two senators said yeah, And that
• 21:26
  Speaker 2: became known as the Magnitski Act.
• 21:27
  Speaker 1: So this law passed what year.
• 21:30
  Speaker 2: Twenty twelve now exists in thirty five countries, and most significantly,
• 21:34
  Speaker 2: it doesn't just apply to Russian human rights of users.
• 21:36
  Speaker 2: It applies to human rights of users anywhere in China
• 21:39
  Speaker 2: and Venezuela and Nicaragua wherever.
• 21:41
  Speaker 1: So when Russia invaded Ukraine, the United States government froze
• 21:47
  Speaker 1: assets of oligarchs who had not been involved in the
• 21:52
  Speaker 1: decision to invade Ukraine, but were presumably benefiting from Putin's government,
• 21:57
  Speaker 1: and so those assets were frozen. As it under the
• 21:59
  Speaker 1: Magnetic Acts, they were frozen.
• 22:01
  Speaker 2: I sort of cleared the path for the tool to
• 22:04
  Speaker 2: be used. So the Magnitski Act was something that was
• 22:06
  Speaker 2: debated very hotly for two years in Washington, and eventually
• 22:09
  Speaker 2: we came to this good outcome.
• 22:11
  Speaker 1: As you got all of this done, This, no doubt
• 22:13
  Speaker 1: would be your great legacy, which is to have this
• 22:16
  Speaker 1: policy put in the place. Have you abandoned the investment world.
• 22:20
  Speaker 2: I'm no longer managing money for anyone, So it's very
• 22:23
  Speaker 2: difficult to be a money manager and be Putin's number
• 22:27
  Speaker 2: one foreign enemy full time human rights activist. But I
• 22:30
  Speaker 2: still am. I still have my finger in the investment world.
• 22:33
  Speaker 1: What is your next mission? Is it to let people
• 22:35
  Speaker 1: know more about the things that are going on in
• 22:37
  Speaker 1: Russia or other places.
• 22:38
  Speaker 2: Well, one of the big things that has happened since
• 22:40
  Speaker 2: all these countries have passed the Magnitski Act was the
• 22:43
  Speaker 2: invasion of Ukraine. It was terrible for everybody, but for
• 22:46
  Speaker 2: me in particular, watching somebody else be victimized by Putin
• 22:49
  Speaker 2: in such a dramatic way. And so I wanted to
• 22:51
  Speaker 2: be helpful to the Ukrainians. And about a week after
• 22:56
  Speaker 2: the war started, the West froze three hundred billion dollars
• 23:00
  Speaker 2: of central bank reserves belonging to the Russian government. And
• 23:03
  Speaker 2: so one of the conclusions I came to really quickly
• 23:05
  Speaker 2: is that money should be used for the defense and
• 23:08
  Speaker 2: reconstruction of Ukraine. And so for the last three and
• 23:10
  Speaker 2: a half years, I've been using the same networks, the
• 23:13
  Speaker 2: same politicians, the same government officials, the same everybody who
• 23:16
  Speaker 2: I'd worked with on the Magnitski Act to try to
• 23:19
  Speaker 2: convince them to confiscate that money to give to Ukraine.
• 23:22
  Speaker 1: As you look back on your life, do you wish
• 23:24
  Speaker 1: you had done something different?
• 23:26
  Speaker 2: Yeah? People often say, you know, what would you do differently?
• 23:29
  Speaker 2: And the answer is, when I finished Stanford, if I
• 23:32
  Speaker 2: had stayed out in California. You know a lot of
• 23:35
  Speaker 2: people wouldn't have died, and you know I probably would
• 23:38
  Speaker 2: probably be doing just as well. This tragedy has given
• 23:41
  Speaker 2: me a mission in my life, meaning and I've done
• 23:44
  Speaker 2: a lot of things to help a lot of people,
• 23:45
  Speaker 2: which does give me some joy in spite of the dangers.
• 23:51
  Speaker 1: Thanks for listening to hear more of my interviews. You
• 23:54
  Speaker 1: can subscribe and download my podcast on Spotify, Apple, or
• 23:58
  Speaker 1: wherever you listen.