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How Congress 'Learns' About Russia
Hedge-fund operator William Browder helped plunder Russia's riches - and renounced his U.S. citizenship - but is still treated as a great truth-teller by a credulous Congress
By Philip Giraldi
A congressman once admitted to me that he and his colleagues know a lot of things, generally speaking, but their knowledge only "extends about one inch deep." In other words, the briefings provided by staffers and in committees is intended to touch only on what is important to know to look well informed in front of the C-SPAN cameras without any unnecessary depth that would only create confusion.
And the information provided must generally conform to what the congressmen already believe to be true and want to hear so no one will be embarrassed.
That such ignorance would be particularly notable in the realm of foreign policy should surprise no one because congressmen as a group are no longer very well educated. Few speak foreign languages and no one any longer studies the history or culture of any country but the United States, and sometimes not even that.
Some Congressmen nevertheless boast about all the countries they have visited to "fact find." They fail to recognize how they travel in a bubble, whisked to foreign lands via military aircraft on the virtually worthless congressional delegations known as CODELS. On these trips, spouses go shopping while American legislators are briefed by the ambassador's staff and the CIA station, both of which, for budget reasons, are more interested in demonstrating what a wonderful job they are doing rather than explaining the complexity of the local situation.
And that is followed by the obligatory visit to listen to the local head of state lie about how everything is going just fine in his country. Given the reality of garbage in, garbage out, it is no wonder that buffoons like Senators John McCain and Lindsey Graham are lauded as foreign-policy experts in the Republican Party. It's called setting the bar really low.
For a Congress intent on appearing to be doing something while doing nothing, one of the worst time wasters is the committee hearing, where the senators and congressmen call in "experts" to explain to them why a certain policy is either worthwhile or useless. Of course, it usually doesn't exactly play out that way, as the committee generally wants to hear testimony that supports its preconceptions about whatever is being discussed, so it only invites those to the party who will say what it wants to hear.
To cite only one of many examples of Congress's unwillingness to listen to any opinion that might challenge the establishment view, a February 16 hearing by the House Foreign Affairs Committee entitled "Iran on Notice" featured four "experts," all of whom were hostile to Iran and advocates of "solutions" ranging from actively encouraging regime change to using military force. No one knowledgeable enough to explain Iran's behavior and/or offer non-confrontational approaches was invited or asked to participate.
I have been closely following some recent hearings that relate to Russia, most particularly the Senate Judiciary session that was supposed to look into the issue of registry under the Foreign Agents Registration Act of 1938 for Russian agents. The hearing, which started on July 26, and was extended to the following day, was entitled "Oversight of the Foreign Agents Registration Act and Attempts to Influence U.S. Elections: Lessons Learned from Current and Prior Administrations."
The first day's session included statements by three Justice Department and FBI officials regarding how the FARA legislation is enforced and how presumed violations of it are investigated. There were some specific comments and questions from individual senators regarding Russian and Saudi government attempts to influence opinion in the United States, but little in the way of drama.
The second day was for additional "expert testimony." It consisted of billionaire hedge-fund director William Browder, who read a prepared statement and then responded to questions. (Video of the statement and the following discussion are available here, with Browder beginning at minute 24.) Browder, who clearly has his own agenda to debunk a film made last year attacking him and a narrative about a former employee Sergei Magnitsky that he has been promoting, was embraced by the senators, who should have known better.
Veteran award-winning journalist Robert Parry describes what took place: "...last week, Senate Judiciary Committee members sat in rapt attention as hedge-fund operator William Browder wowed them with a reprise of his Magnitsky tale and suggested that people who have challenged the narrative and those who dared air the documentary one time at Washington's Newseum last year should be prosecuted for violating the Foreign Agent Registration Act (FARA)."
Browder's Tall Tales
Not even one senator challenged William Browder's sometimes extraordinary claims about Russia's government in general and its President Vladimir Putin in particular, including that Putin is the richest man in the world due to all the money that he has stolen.
As Browder appears to be seeking to use FARA to punish those who have criticized him or even watched a movie about him based on the assumption that they must be Russian agents, he might well be regarded as not exactly a disinterested source providing objective information about Russia and its government.
American-born British citizen Browder has been the principal promoter of a narrative about Russian government malfeasance relating to his former employee Sergei Magnitsky, who, Browder claims, was a courageous whistleblower who was falsely arrested after exposing corruption and eventually died in a Moscow prison after being tortured.
Browder's energetic promotion of the Magnitsky story has poisoned relations with Moscow and led to the passage of the Magnitsky Act by Congress in 2012. Russia rightly has seen the legislation, which includes sanctions on some officials, as unwarranted interference in the operation of its judicial system.
Browder astutely portrays himself as a human-rights campaigner dedicated to promoting the legacy of Magnitsky, but his own biography is inevitably much more complicated than that. The grandson of Earl Browder, the former general secretary of the American Communist Party, William Browder studied economics at the University of Chicago, and obtained an MBA from Stanford.
From the beginning, Browder concentrated on Eastern Europe, which was beginning to open up to the west. In 1989 he took a position at highly respected Boston Consulting Group dealing with reviving failing Polish socialist enterprises. He then worked as an Eastern Europe analyst for Robert Maxwell, the unsavory British press magnate and Mossad spy, before joining the Russia team at Wall Street's Salomon Brothers in 1992.
He left Salomon in 1996 and partnered with Edmond Safra, the controversial Lebanese-Brazilian-Jewish banker who died under mysterious circumstances in a fire in 1999, to set up Hermitage Capital Management Fund. Hermitage is registered in tax havens Guernsey and the Cayman Islands.
It is a hedge fund that was focused on "investing" in Russia, taking advantage initially of the loans-for-shares scheme under Boris Yeltsin, and then continuing to profit greatly during the early years of Vladimir Putin's ascendancy. By 2005 Hermitage was the largest foreign investor in Russia.
Browder had renounced his U.S. citizenship in 1997 and became a British citizen apparently to avoid American taxes, which are levied on worldwide income.
In his book, Red Notice: A True Story of High Finance, Murder and One Man's Fight for Justice, he depicts himself as an honest and honorable Western businessman attempting to function in a corrupt Russian business world. That may or may not be true, but the loans-for-shares scheme that made him his initial fortune has been correctly characterized as the epitome of corruption, an arrangement whereby foreign "investors" worked with local oligarchs to strip the former Soviet economy of its assets paying pennies on each dollar of value. Along the way, Browder was reportedly involved in making false representations on official documents and bribery.
As a consequence of what came to be known as the Magnitsky scandal, Browder was eventually charged by the Russian authorities for fraud and tax evasion. He was banned from reentering Russia in 2005, even before Magnitsky died, and began to withdraw his assets from the country. Three companies controlled by Hermitage were eventually seized by the authorities, though it is not clear if any of their assets remained in Russia. Browder himself was convicted of tax evasion in absentia in 2013 and sentenced to nine years in prison.
Browder has assiduously, and mostly successfully, made his case that he and Magnitsky have been the victims of Russian corruption both during and since that time, though there have been credible skeptics, including Israel Shamir, who have dissected the sordid side to his rise to power and wealth.
Browder has reportedly used political contributions and threats of lawsuits filed by his battery of lawyers to popularize and sell his tale to leading American politicians like Senators John McCain and Ben Cardin, ex-Senator Joe Lieberman, as well as to a number of European parliamentarians and media outlets.
But there is, inevitably, another side to the story, something quite different, which documentary filmmaker Andrei Nekrasov, an outspoken critic of Russian President Vladimir Putin, presented to the viewer in his film The Magnitsky Act: Behind the Scenes.
The film has only been shown publicly once, at the Newseum in Washington on June 13, 2016 - a viewing that I attended, and that proceeded in spite of threats from Browder and attempted disruption by his supporters. Browder has characteristically used lawsuits and threats of still more legal action to intimidate numerous television stations in Europe and prevent additional showings.
Nekrasov discovered what he believed to be holes in the narrative about Magnitsky that had been carefully constructed and nurtured by Browder. He provides documents and also an interview with Magnitsky's mother maintaining that there is no clear evidence that he was beaten or tortured and that he died instead due to the failure to provide him with medicine while in prison or treatment shortly after he had a heart attack.
A subsequent investigation ordered by then Russian President Dimitri Medvedev in 2011 confirmed that Magnitsky had not received medical treatment, contributing to this death, but could not demonstrate that he had been beaten even though there was suspicion that that might have been the case.
Nekrasov also claimed that much of the case against the Russian authorities is derived from English language translations of relevant documents provided by Browder himself. The actual documents sometimes say something quite different, including that Magnitsky is consistently referred to as an accountant, which he was, not as a lawyer, which he wasn't. Browder calls him a lawyer because it better fits into his preferred narrative.
Magnitsky the accountant appears in the document of his deposition which was apparently part of a criminal investigation of possible tax fraud, meaning that he was no whistleblower and was instead a suspected criminal.
Other discrepancies are cited by Nekrasov, who concludes that there was indeed a huge fraud related to Russian taxes but that it was not carried out by corrupt officials. Instead, it was deliberately ordered and engineered by Browder with Magnitsky, the accountant, personally developing and implementing the scheme used to carry out the deception.
To be sure, Browder and his international legal team have presented documents in the case that contradict much of what Nekrasov has presented in his film. It might be that Browder and Magnitsky have been the victims of a corrupt and venal state, but it just might be the other way around.
Having a highly politicized Congress and a vengeful Browder lining up against a conveniently unpopular Russian government just might suggest that one is hearing a narrative that peddles lies as much as it tells the truth.
The Senate just might consider looking more deeply into Browder's business activities while in Russia before jumping to conclusions and bringing him in as an "expert" on anything. He should not be given a free pass because he is saying things about Russia and Putin that fit neatly into a Washington establishment profile and make Senators smile and nod their heads.
As soon as folks named McCain, Cardin and Lieberman jump on a cause, it should be time to step back a bit and reflect on what the consequences of proposed action might be.
One might also ask why anyone who has a great deal to gain by having a certain narrative accepted should be completely and unquestionably trusted, the venerable Cui bono? standard. And then there is a certain evasiveness on the part of Browder, who notably makes outrageous claims about the Russians but does not do so under oath, where he might be subject to legal consequences for perjury.
The film shows him huffing and puffing to explain himself at times and he has avoided being served with subpoenas on allegations connected to the Magnitsky fraud that are making their way through American courts. In one case, he can be seen on YouTube running away from a server, somewhat unusual behavior if he has nothing to hide.
So, if you wonder why the United States Congress makes such bad decisions, it just might be due to the kind of information that it gets when it travels the world and holds hearings. Inviting a man who has renounced his U.S. citizenship to avoid paying taxes, who likely engaged in questionable business practices, and who very definitely has his own agenda, which includes vilifying the Kremlin, is hardly the way to go if one truly wants to understand Russia, particularly as no one participated in the hearing to rebut his claims.
And if fining American citizens or forcing them to register as enemy agents because they may have supported or gone to see a movie is reflective of that gentleman's mindset, there is even more good reason to reject the snake oil that he might be selling.