Red Notice

by Bill Browder, 2015

Eye-opening book about Russia. It details Bill Browder’s experience as a hedge fund manager starting soon after communism fell through his battle for justice for his lawyer, Sergie Magnitsky, who was tortured to death in a Russian prison. Bill fought and fought and fought to keep the truth in the forefront, while Putin and cronies did everything they could to prevent the passage of the Magnitsky Act. The lies and the evil they concoct are never-ending. I had a feeling the Russian government was bad but this reveals just how bad. When the Magnitsky Act finally passed in 2012, Putin had to retaliate. He eventually banned Americans from adopting Russian children – many of whom were already adopted and ready to be picked up – many of whom were in need of medical care they could get only in America.

When Bill Browder started his hedge fund in Russia in 1996, Boris Yeltsin was the leader. When Putin first came to power (in 2000), Putin was on the same side as Bill Brower, who by then was starting to discover corruption in Russia and exposing it. But a few years later, Putin became his adversary because Putin was in on the corruption.

When he moved to Moscow in 1995 or 1996, he sets up an office: “Once I had the office, I needed people to help me run it. While tens of millions of Russions were desperate to make a living, hiring a good English-speaking employee in Moscow was almost impossible. Seventy years of communism had destroyed the work ethic of an entire nation. Millions of Russians had been sent to the gulags for showing the slightest hint of personal initiative. The Soviets severely penalized independent thinkers, so the natural self-preservation reaction was to do as little as possible and hope that nobody would notice you.”

In 1997, when Sidanco, one of the Russian company’s he invested in early on, decided to triple the number of shares and sell them for cheap to everyone but him, he tells the fable of the Magic Fish:

“There’s a famous Russian proverb about this type of behavior. One day, a poor villager happens upon a magic talking fish that is ready to grant him a single wish. Overjoyed, the villager weighs his options: “Maybe a castle? Or even better–a thousand bars of gold? Why not a ship to sail the world?” As the villager is about to make his decision, the fish interrupts him to say that there is one important caveat: whatever the villager gets, his neighbor will receive two of the same. Without skipping a beat, the villager says, “In that case, please poke one of my eyes out.”

“The moral is simple: when it comes to money, Russians will gladly–gleefully, even–sacrifice their own success to screw their neighbor.”

In February 2002, he forced his driver to stop and help a man collapsed in the road. The man had epilepsy and had had an attack. No one would stop to help him. The police arrived and rather than helping the man, they looked for someone to blame. Finally, the driver was able to explain that they had just stopped to help the man. “As we drove off, Alexei explained why he’d been so reluctant to help, as Elena translated: “This is what always happens in Russia. It doesn’t matter if that guy was even hit or not. Once the police get involved, they will blame someone and that’s the end of the story.”

“Thankfully, because Alexei had been a colonel in the traffic police, he was able to exricate himself. But for the average Muscovite, a single act of Good Samaritan-ship could lead to a seven-year prison sentence. And every Russian knew this.”

He begins to expose corruption in Russian businesses: “You may wonder why Vladimir Putin allowed me to do these things in the first place. The answer is that for a while our interests coincided. When Putin became president in January 2000, he was granted the title of President of the Russian Federation, but the actual power of the presidency had been hijacked by oligarchs, regional governors, and organized crime groups. As soon as he took office, it became his highest priority to wrest power from these men and return it to its rightful place in the Kremlin, or more accurately, into his own hands.”

“Many people have asked why the oligarchs didn’t just kill me for exposing their corruption. It’s a good questio. In Russia, people get killed for a lot less. It was a completely lawless society where anything could happen, and where anything often did happen.

“What saved me was not anyone’s fear of the law, but paranoia. Russia is a country that lives on conspiracy theories. There are layers upon layers of explanations for why things happen, and none of them is straightforward. In the mind of the average Russian, it was inconceivable that an unassuming American guy who barely spoke Russian would aggressively be going after Russia’s most powerful oligarchs on his own. The only plausible explanation was that I must have been operating as a proxy for someone powerful. Considering how each of my battles with the oligarchs led to an intervention by Putin or his government, most people assumed that this someone was none other than Vladimir Putin himself. It was a ridiulous thought. I had never met Putin in my life. But because everyone thought I was “Putin’s guy,” no one touched me.”

“Unfortunately, I wasn’t paying enough attention to see that Putin and I were on a collision course. After Khodorkovsky’s arrest and conviction I didn’t alter my behavior at all. I carried on exactly as before–naming and shaming Russian oligarchs. There was a difference this time, though. Now, instead of going after Putin’s enemies, I was going after Putin’s own economic interests.”

“But Putin was not as brazen then [2005] as he is now. Back then killing a foreigner would have been too drastic a move. And putting me in prison would have made Putin just as much of a hostage to the situation as I was.”

“On October 1, 1939, Winston Churchill made a famous speech in which he discussed Russia’s prospect of joining the Second World War: “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma; but perhaps there is a key. That key is Russian national interest.””

His Russian lawyer, Sergei Magnitsky, has been falsely arrested and is in jail beginning in November 2008. He refuses to give in and tell lies and so he is tortured repeatedly. “Sergei was religious, and he would not violate God’s ninth commandment: “Thou shalt not bear false witness.” Under no circumstances would he plead guilty to a crime he did not commit, nor would he falsely implicate me. This, it seems, would have been more poisonous and painful to Sergei than any physical torture.

“… In spite of the loss of his freedom, his health, his sanity, and possibly even his life, he would not compromise his ideals or his faith.

“He would not give in.”

“As Sergei endured his living nightmare, I was living in a daze. Saturday mornings were the worst. I would wake early and roll over to look at Elena in our comfortable king-size bed. Beyond the edge of our bed was a window, and beyond that London. I was free and comfortable and loved. I could still touch and feel what love meant, while Sergei could only remember. It made me feel sick. My desire to reconcile my family’s communist background with my own capitalist ambitions had brought me to Russia, but, naively, I never imagined that this pursuit would result in a human tragedy.”

He starts the next chapter, November 16, 2009:

“On these days, I would get up, shuffle to the bathroom, turn on the shower, and get in. The hot water was meant to be cleansing, only it wasn’t. The dirt fell free, but the guilt coated me like tar.”

After Russia started releasing lies about him, rather than do a press release, he released a You Tube video to expose the lies: “Hermitage Reveals Russian Police Fraud.”

The Katyn Principle comes from April 1940 when a Russian officer was assigned to execute as many Polish POWs as he could. He did so every night for 28 days, executing 7,000 Polish prisoners. He was part of a machine that executed 22,000 Polish men, most of whom were buried in the Katyn forest. When the mass graves were found in 1943, the Soviets blamed the Germans. They manufacured evidence to back it up and the world accepted their version. Decades later, in 1990, they admitted the truth. “But when Vladimir Putin came to power in 2000, instead of dismantling this machine of lying and fabrication he modified it and made it all the more powerful.”

Sergei Magnitsky was beaten to death in a Russian prison on November 16, 2009. “Sergei Magnitsky was killed for his ideals. He was killed because he believed in the law. He was killed because he loved his people, and because he loved Russia. He was thirty-seven years old.”

Bill Browder works for years for justice for Sergei. He gets Sergei’s family out of Russia and they now live nearby to him in London. He exposes the corruption and greed of the men who caused Sergei’s death in a You Tube video, the Kuznetsov video and then the Karpov video, that show the mansions and luxuries these corrupt policemen have amassed. Then a video about Olga Stepanova on April 20, 2011.

The Magnitsky Act took a long time to pass. The bill was introduced on May 19, 2011. It finally passed our U.S. Congress in December 2012. Putin had to retaliate, so he came up with a plan that would hurt only innocent Russians and Americans – no further adoptions of Russian children by Americans. “This meant that in addition to punishing American families who were waiting for Russian children to join them, Putin was also punishing, and potentially killing, defenseless orphans in his own country. To say that this was a heartless proposal doesn’t even qualify as an understatement. It was evil, pure and simple.”…”While Putin expected a bad reaction from the United States, he had no idea what kind of hornet’s nest he’d stirred up in his own country. One can criticize Russians for many things, but their love of children isn’t one of them. Russia is one of the only countries in the world where you can take a screaming child into a fancy restaurant and no one will give you a second look. Russians simply adore children.”

“The very next day, the adoption ban was voted on in the Duma, and in spite of Lavrov’s wish that it make a “balanced decision,” 420 members voted for it and only 7 voted against. A week later, on December 28, Putin signed the adoption ban into law. The Magnitsky Act had taken two and a half years to become law in the United States; Russia’s anti-Magnitsky Act took two and a half weeks.”

…”In Putin’s world, the humiliator cannot, under any circumstances, become the humiliatee. Yet this is precisely what happened in the wake of the adoption ban.

“What does a man like Putin do when he is humiliated? As we’d seen so many times before, he lashes out against the person who humiliated him.

“Ominously, that person was me.”

Putin issues a “Red Notice” on Bill Browder and puts him on trial in Russia in absentia. It’s all lies. The world blows Putin off, rejects the “Red Notice.” But Bill Browder has to continually, for the rest of his life, fight the unending lies and keep his guard up.

A film, Justice for Sergei, was what caused Bill Browder to finally let out his grief. He cried and cried and cried. Up until that point, he had held it all in.

“I have to assume that there is a very real chance that Putin or members of his regime will have me killed someday. Like anyone else, I have no death wish and I have no intention of letting them kill me. I can’t mention most of the countermeasures I take, but I will mention one: this book. If I’m killed, you will know who did it.”

“If you asked me when I was at Stanford Business School what I would have thought about giving up a life as a hedge fund manager to become a human rights activist, I would have looked at you as if you were out of your mind.

“But here I am twenty-five years later, and that’s exactly what I’ve done. Yes, I could go back to my previous life. But now that I’ve seen this new world, I can’t imagine doing anything else. While there is nothing wrong with pursuing a life in commerce, that world feels like watching TV in black and white. Now, all of a sudden, I’ve installed a wide-screen color TV, and everything about my life is richer, fuller, and more satisfying.

“This doesn’t mean that I don’t have profound regrets, though. The obvious one is that Sergei is no longer with us. If I could do it all over again, I would never have gone to Russia in the first place. I would gladly trade all of my business success for Sergei’s life.”

Last paragraph: “Early in this book, I said that the feeling I got from buying a Polish stock that went up ten times was the best thing to ever happen to me in my career. But the feeling I had on that balcony in Brussels with Sergei’s widow and son, as we watched the largest lawmaking body in Europe recognize and condemn the injustices suffered by Sergei and his family, felt orders of magnitude better than any financial success I’ve ever had. If finding a ten bagger in the stock market was a highlight of my life before, there is no feeling as satisfying as getting some measure of justice in a highly unjust world.”

In Acknowledgements:

“My opponents have engaged in a lot of crazy speculation regarding how I’ve managed to achieve some measure of justice for Sergei Magnitsky. The Russian govenrment has alternately accused me of being a CIA agent, an MI6 spy, a billionaire who has bribed every member of Congress and the European Parliament, and part of a Zionist conspiracy to take over the world. Of course, the truth is much simpler. The reason why this campaign has worked is because anyone with a heart who has heard about Sergei’s ordeal has wanted to help.”