This week, we speak with Bill Browder, head of the Global Magnitsky Justice Campaign and author of the recently released “Freezing Order: A True Story of Money Laundering, Murder and Surviving Vladimir Putin’s Wrath.” Founder and CEO of Hermitage Capital Management, which until 2005 was an investment advisor to Russia’s largest foreign investment fund, Browder is also the author of “Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice“His latest book”Freezing Order: A True Story of Money Laundering, Murder, and Surviving Vladimir Putin’s Wrath“
We discuss his early career at Solomon Brothers, whose cutthroat culture led him to seek out overlooked sources of potential investment returns. In the era after the fall of the Berlin Wall, it took him to the countries of the Eastern Bloc, first Poland, then Russia.
He launched Hermitage Capital Management in Moscow, Russia and began analyzing and accumulating Russian companies. He discovered massive amounts of corruption, with the oligarchs who ran these still partially state-owned companies helping themselves to vast amounts of wealth and capital. His vision was a “naming and shaming” campaign, in which he would take a stand and then promote the corruption in the Western media. Often, the oligarchs running the company were fired by the (then) newly elected President of Russia, Vladimir Putin. Hermitage Capital and Putin’s interests seemed aligned.
Browder realized that in Russia, people believe everything is a conspiracy and nothing is what it seems. The oligarchs looked at him with speculation, “There’s no way some guy from the South Side of Chicago – some American – could show up in Russia and take on one of the most powerful and dangerous oligarchs of his own free will.” It was clear that someone more powerful would be behind it. Many concluded that it was a brilliant strategy by Putin to consolidate his power and cleverly gain control over Russia’s most valuable companies.
This all went south after Putin gained full control of Russia. Hermitage Capital was raided; Browder’s attorney, Sergei Magnitsky, was arrested, jailed, tortured, and then killed in police custody.
Browder sought justice for these violent crimes, eventually leading the United States and 30 other countries to pass the Magnitsky Act. The Global Magnitsky Act of 2016 allows the US government to sanction foreign government officials worldwide who are considered human rights criminals, freeze their assets and ban them from entering the US.
A transcript of our conversation on Tuesday is available here.
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Be sure to check out our Masters in Business next week with Eric Balchunas, senior ETF analyst at Bloomberg, where he’s co-creator of the Bloomberg Podcast Trillions and co-host of Bloomberg TV’s ETF IQ. He has written several books, most recently “The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions“