WEBVTT - Bill Browder

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<v Speaker 1>With the breakup of the Soviet Union, Russia became a

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<v Speaker 1>fertile place for many Western capitalists to invest. Perhaps the

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<v Speaker 1>most successful of them was Bill Browner, who was actually

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<v Speaker 1>the grandson of the head of the American Communist Party.

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<v Speaker 1>Bill Browner built Hermitage Capital into one of the leading

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<v Speaker 1>Western investors in Russia, but he ran afoul of the

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<v Speaker 1>Russian government and had to leave the country. I had

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<v Speaker 1>a chance to sit down with Bill Browder in Berlin

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<v Speaker 1>to talk about what he's now doing and why he's

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<v Speaker 1>trying to get assets of Russia frozen so that they

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<v Speaker 1>might be used for the reconstruction of Ukraine. So I

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<v Speaker 1>don't know if Vladimir Putin has an enemy's list, but

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<v Speaker 1>if he does, you're probably on it. How did you

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<v Speaker 1>manage to get on his enemies list?

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<v Speaker 2>Well, I'm definitely on it, high on it, perhaps even

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<v Speaker 2>the highest on it among foreigners. And the way I

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<v Speaker 2>got on it was a lobbied for a piece of

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<v Speaker 2>legislation called the Magniski Act is named after my Russian

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<v Speaker 2>lawyer Sergei Magnisky, who was murdered by the Putin regime

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<v Speaker 2>in Russian police custody, and the Magniski Act freezes the

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<v Speaker 2>assets and bans the visas of human rights violators from Russia.

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<v Speaker 2>And Putin is a human rights violator. He's a very

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<v Speaker 2>wealthy man, and he values his money more than human life,

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<v Speaker 2>and so the idea that Bill Browder could get his

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<v Speaker 2>money frozen was just the biggest insult ever to him.

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<v Speaker 2>And for that reason, he's been chasing me around the

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<v Speaker 2>world ever since.

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<v Speaker 1>Are you not afraid of falling off of a building somewhere,

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<v Speaker 1>or have being poisoned?

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<v Speaker 2>All sorts of terrible things have happened to people around

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<v Speaker 2>me in this whole conflict. Do I live my life

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<v Speaker 2>in fear every day? The answer is no. Do I

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<v Speaker 2>understand that there is a very real chance they could

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<v Speaker 2>do something terrible to me? And the answer is yes,

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<v Speaker 2>Do I take precautions? Many So this is Yevgeny Pregosion.

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<v Speaker 2>He was the head of the Wagner group. He marched

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<v Speaker 2>on Moscow. He humiliated Putin, and Putin waited like three

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<v Speaker 2>or four months to kill him, And in fact, every

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<v Speaker 2>day during that three or four months, everyone was saying,

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<v Speaker 2>how is this guy still alive? And then one day

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<v Speaker 2>he was on his private jet with his entire senior

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<v Speaker 2>team of mercenaries. They're flying from Saint Petersburg to Moscow

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<v Speaker 2>and one of the wings exploded on their private jet,

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<v Speaker 2>and it just so happened that there was somebody on

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<v Speaker 2>the ground with their Apple iPhone watching this plane careening

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<v Speaker 2>to the ground. And this had two effects. One was

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<v Speaker 2>that he killed this guy who humiliated him, which is

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<v Speaker 2>a very important part of Putin's thing. But the second

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<v Speaker 2>is they had this video, and they showed this video

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<v Speaker 2>on Russian national TV and all over the world.

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<v Speaker 1>During President Trump's first term, President Trump met with mister

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<v Speaker 1>Putin at one point, and mister Putin, as I understand it,

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<v Speaker 1>said I'd like to get some things back from the

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<v Speaker 1>United States, specific that I'd like to have Bill Browder

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<v Speaker 1>brought back to Russia so that I can make sure

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<v Speaker 1>he's properly treated in Russia on their our justice system.

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<v Speaker 1>Where you surprise is that President Trump said, well, let

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<v Speaker 1>me think about it for a couple of days. And

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<v Speaker 1>were you surprised during that period of time that more

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<v Speaker 1>people didn't jump up and down and say this is

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<v Speaker 1>outrageous that the president we even consider doing this.

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<v Speaker 2>It was a pretty trying week of my life, so

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<v Speaker 2>This was July twenty eighteen. The two presidents met at

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<v Speaker 2>the Helsinki Summit. It was the monday after Robert Muller,

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<v Speaker 2>the special prosecutor, had indicted twelve Russian military intelligence officers

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<v Speaker 2>for hacking the election. I've been on the top of

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<v Speaker 2>Putin's mind since the Magniski Act was passed. But what

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<v Speaker 2>was surprising was when the next question went to Trump

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<v Speaker 2>and they said, what do you think of this offer?

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<v Speaker 2>And without skipping a beat, he said, I think it's

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<v Speaker 2>an incredible offer to have the most powerful man in

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<v Speaker 2>the free world offering to hand me over to a

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<v Speaker 2>man who wants to kill me. That was very surprising.

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<v Speaker 1>What did you do when you heard this? Did you

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<v Speaker 1>go into hiding or.

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<v Speaker 2>I thought about getting on an airplane and leaving the

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<v Speaker 2>United States, But my wife said, well, probably not going

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<v Speaker 2>to all happen that quickly. And now the whole world

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<v Speaker 2>wants to know who is this Bill Browder, So I

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<v Speaker 2>think you should tell them. And so I spent the

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<v Speaker 2>next few days on doing interviews and explaining the whole story.

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<v Speaker 2>And there actually was a lot of outrage because in Washington,

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<v Speaker 2>the big question was, you know, is do we want

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<v Speaker 2>to hand over. You know Bill Browner, who I know

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<v Speaker 2>a lot of people in Washington who helping with the

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<v Speaker 2>Magniski Act. And they had this vote in the Senate,

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<v Speaker 2>and the Senate voted ninety eight to zero not to

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<v Speaker 2>hand me over.

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<v Speaker 1>Now, you have never met Putin, but you must have

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<v Speaker 1>studied him very carefully. Obviously. Were you surprised that he

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<v Speaker 1>decided to invade Ukraine a few years ago?

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<v Speaker 2>Very surprised. So, leading up to that invasion, the Russian

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<v Speaker 2>troops all gathered on the border, and there was six

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<v Speaker 2>or eight weeks of uncertainty about whether he would or

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<v Speaker 2>wouldn't invade, And I said, no, he's just angling to

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<v Speaker 2>get all concessions from the West. He's not going to

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<v Speaker 2>go in because it would be insane to go in,

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<v Speaker 2>because there'll be unbelievable sanctions. His military is totally hollowed out,

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<v Speaker 2>there's corruption. And then he went in. And so I

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<v Speaker 2>was surprised and very surprised.

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<v Speaker 1>Actually, are you surprised that it has taken this long

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<v Speaker 1>for the war to keep going on? In other words, Ukraine,

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<v Speaker 1>it was a thought at the time, will be taken

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<v Speaker 1>over in three or four days. I was Putin's plan

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<v Speaker 1>as I understand it. Obviously, the wars now on it's

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<v Speaker 1>third year or so, there's no clear resolution as we talk.

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<v Speaker 1>You see, any way, he might say I'll back out,

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<v Speaker 1>but I don't really want to do this.

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<v Speaker 2>Putin is never going to back down. So I was

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<v Speaker 2>surprised that the Ukrainians did as well as they did.

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<v Speaker 2>At the very beginning of the war. I think that

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<v Speaker 2>everybody thought that they would lose very quickly, and the

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<v Speaker 2>Ukrainians put up such a bold and really impressive fight

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<v Speaker 2>that they pushed the Russians back once it wasn't a

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<v Speaker 2>sort of three day capitulation. And since that point, it's

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<v Speaker 2>been clear to me that there is really no end

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<v Speaker 2>to this war. And the reason there's no end to

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<v Speaker 2>this war is that the Ukrainians are not going to surrender,

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<v Speaker 2>and Putin can't back down because if he were to

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<v Speaker 2>back down, he would look weak and he would probably

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<v Speaker 2>lose power. And so for him, this war is a

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<v Speaker 2>war to stay in power, and for the Ukrainians this

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<v Speaker 2>is a war of survival. So neither side is going

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<v Speaker 2>to give up, and neither side has a definitive military advantage.

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<v Speaker 1>Are you surprised that Donald Trump, who said he could

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<v Speaker 1>probably get this war resolved within twenty four hours, has

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<v Speaker 1>not yet been able to get Putin, who he regards

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<v Speaker 1>as a friend, able to come to the negotiating table,

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<v Speaker 1>or you're not surprised.

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<v Speaker 2>I'm not surprised at all. Putin is doing this war

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<v Speaker 2>in order to stay in power. He wants to stay

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<v Speaker 2>in power, to stay alive. There's nothing Donald Trump that

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<v Speaker 2>can offer him that will keep him alive and keep

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<v Speaker 2>him in power. He's doing this because he needs a

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<v Speaker 2>foreign enemy to distract the Russian people from their own problems.

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<v Speaker 2>And so there's nothing Donald Trump can do for Vladimir

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<v Speaker 2>Putin that's going to make him stop.

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<v Speaker 1>Let's talk about the Browder family. How you came to

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<v Speaker 1>become an investor in Russia. Your grandfather, for those who

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<v Speaker 1>don't know, was a very prominent communist leader in the

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<v Speaker 1>United States. His name was Earl Browner. Can you tell

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<v Speaker 1>us about his background and how he came to such

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<v Speaker 1>prominence in the United States.

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<v Speaker 2>So, my grandfather, Earl was a labor union organizer from Wichita, Kansas,

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<v Speaker 2>and he was so good at organizing the union that

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<v Speaker 2>one day he was spotted by the communists and they said,

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<v Speaker 2>if you like labor unionism. You're going to love communism,

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<v Speaker 2>why don't you come to Russia and check it out.

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<v Speaker 2>And so in nineteen twenty seven, my grandfather Earl went

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<v Speaker 2>to Moscow. When he got there, he met a young

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<v Speaker 2>woman who became my grandmother. My father was born in Moscow.

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<v Speaker 2>And then five years later, in nineteen thirty two, they

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<v Speaker 2>were sent back by the Communist Party so that my

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<v Speaker 2>grandfather could become the general secretary of the American Communist Party.

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<v Speaker 2>He ran for president twice against Roosevelt in nineteen thirty

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<v Speaker 2>six nineteen forty on the Communist ticket. He was arrested

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<v Speaker 2>in nineteen forty one, and so there was demonstrations all

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<v Speaker 2>over the inner cities of America to free year old Browner,

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<v Speaker 2>and then Mayor LaGuardia called up Roosevelt and said, you

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<v Speaker 2>got to let this guy go, and he was pardoned

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<v Speaker 2>in nineteen forty two. He was eventually kicked out of

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<v Speaker 2>the Communist Party in nineteen forty five for being too

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<v Speaker 2>much of a capitalist, and then persecuted viciously during the

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<v Speaker 2>McCarthy era.

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<v Speaker 1>So what did he do with the rest of his life?

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<v Speaker 1>And did you ever meet your grandfather?

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<v Speaker 2>You know, I didn't know him as a Communist leader.

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<v Speaker 2>I knew him as my grandfather. He passed away when

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<v Speaker 2>I was nine years old, but I remember this sort

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<v Speaker 2>of amiable old man with white hair and a white mustache,

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<v Speaker 2>who smoked a pipe in his office and had wise

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<v Speaker 2>things to say from time to time.

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<v Speaker 1>So where were you born.

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<v Speaker 2>I was born in Princeton.

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<v Speaker 1>And your father was at that time at Princeton or.

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<v Speaker 2>He was at the Institute of Advanced Studies where Einstein

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<v Speaker 2>was at the time.

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<v Speaker 1>And your mother was she a mathematician or.

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<v Speaker 2>She was one of the first women to go to

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<v Speaker 2>MIT and they met when and my father was an

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<v Speaker 2>instructor at MIT.

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<v Speaker 1>And when you're nursing school and growing up, did people

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<v Speaker 1>say your grandfather was a Communist or they say your

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<v Speaker 1>father is the head of the math department.

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<v Speaker 2>Growing up around the university, I was the son of

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<v Speaker 2>Felix Brown, or the chairman of the math department.

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<v Speaker 1>So you graduated from the Universe Chicago, And then did

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<v Speaker 1>you say, I want to be in the investment world,

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<v Speaker 1>I want to go to business school. What did you

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<v Speaker 1>decide to do.

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<v Speaker 2>My first job out of the University of Chicago was

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<v Speaker 2>as a consultant at Baine in company in Boston. They

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<v Speaker 2>had special postgraduate program for two years.

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<v Speaker 1>So you went to Baine And how long were you

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<v Speaker 1>at Baine?

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<v Speaker 2>Two years? And then I went to Stanford Business School.

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<v Speaker 2>I was really on the wrong track towards something that

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<v Speaker 2>was not respected my family, to be a businessman.

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<v Speaker 1>So he graduated from Stanford Business School. Then what did

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<v Speaker 1>you do?

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<v Speaker 2>Well? I graduated at a very interesting time. I become

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<v Speaker 2>a capitalist. And I graduated Stanford Business School in nineteen

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<v Speaker 2>eighty nine, and this is a very auspicious year because

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<v Speaker 2>this is the year that the Berlin Wall came down.

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<v Speaker 2>I'm trying to figure out what do I do with

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<v Speaker 2>my life post business school? And one day I had

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<v Speaker 2>this epiphany, which is that if my grandfather was the

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<v Speaker 2>biggest communist in America, I'm going to try to become

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<v Speaker 2>the biggest capitalist in Eastern Europe. And that's what I

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<v Speaker 2>set out to do.

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<v Speaker 1>So you set up a firm called Hermitage Capital Management.

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<v Speaker 2>I end up moving to London. I have several jobs.

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<v Speaker 2>I end up at Solomon Brothers working on their Russian.

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<v Speaker 1>Desk, and then how long were you there?

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<v Speaker 2>I work on the investment banking side, and my first

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<v Speaker 2>assignment was to advise a fishing fleet located in Murmansk

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<v Speaker 2>on their privatization. I go up to Murmansk. I discover

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<v Speaker 2>they have these enormous ships, four hundred feet long, just gigantic.

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<v Speaker 2>And I asked the guy who runs the fishing fleet,

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<v Speaker 2>how much do these things cost? Twenty million dollars? New

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<v Speaker 2>how many you have in your fleet? One hundred so

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<v Speaker 2>two billion dollars worth of ships? And I had been

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<v Speaker 2>hired to advise them on whether to exercise their legitimate

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<v Speaker 2>right under the privatization program of Russia to buy fifty

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<v Speaker 2>one percent. And I said, at what price is the

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<v Speaker 2>government selling fifty one percent? Two and a half million dollars?

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<v Speaker 2>And that was the moment I said to myself, I

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<v Speaker 2>want to be an investor in this stuff, not an

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<v Speaker 2>advisor on this stuff.

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<v Speaker 1>So you quit Salomon Brothers.

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<v Speaker 2>Actually was able to convince Solomon Brothers to invest in

0:11:13.760 --> 0:11:16.400
<v Speaker 2>some of these things. We made a whole bunch of money.

0:11:16.559 --> 0:11:20.720
<v Speaker 2>I decided to quit Solomon and do this on my own,

0:11:20.840 --> 0:11:23.240
<v Speaker 2>and that's when I set up Hermitage Capital Management.

0:11:23.559 --> 0:11:25.599
<v Speaker 1>Now, for those who don't know, are Hermitage is the

0:11:25.679 --> 0:11:28.360
<v Speaker 1>name of a museum in Saint Petersburg. I assume your

0:11:28.400 --> 0:11:29.720
<v Speaker 1>name that after that you're.

0:11:29.559 --> 0:11:31.520
<v Speaker 2>One of the smart ones who figured that out. But yes,

0:11:31.679 --> 0:11:34.080
<v Speaker 2>that's where they kept all the treasures in Russia.

0:11:34.160 --> 0:11:37.160
<v Speaker 1>So you set up Hermitage Capital Management. Did you have

0:11:37.200 --> 0:11:39.200
<v Speaker 1>any money to capitalize the business?

0:11:39.720 --> 0:11:41.400
<v Speaker 2>I didn't have any money at all. One person in

0:11:41.440 --> 0:11:46.360
<v Speaker 2>particular I developed a very close friendship with. That's a

0:11:46.400 --> 0:11:49.800
<v Speaker 2>man named Edmund Saffra, was the owner of republic National

0:11:49.800 --> 0:11:52.719
<v Speaker 2>Bank of New York, the bank that all the billionaires

0:11:52.720 --> 0:11:54.680
<v Speaker 2>and rich people of the time kept their money. And

0:11:54.840 --> 0:11:57.280
<v Speaker 2>Edmund said, I will put up the first twenty five

0:11:57.320 --> 0:11:59.760
<v Speaker 2>million in your fund, and if I like you, I'll

0:11:59.760 --> 0:12:02.800
<v Speaker 2>get my friends to invest with you. So I said, great,

0:12:03.240 --> 0:12:03.839
<v Speaker 2>let's do it.

0:12:04.000 --> 0:12:07.559
<v Speaker 1>You started investing, and I assume you did. Okay.

0:12:07.760 --> 0:12:12.720
<v Speaker 2>It was the most fortuitous launch of an investment fund

0:12:12.800 --> 0:12:17.480
<v Speaker 2>that's probably ever happened. In the first eighteen months of

0:12:17.480 --> 0:12:20.960
<v Speaker 2>my life as as a fund manager, we were up

0:12:21.040 --> 0:12:22.559
<v Speaker 2>eight hundred and sixty five percent.

0:12:23.080 --> 0:12:26.480
<v Speaker 1>So you were buying stakes in Russian government owned companies

0:12:26.679 --> 0:12:29.360
<v Speaker 1>that you could privatize and buy them at ten cents

0:12:29.400 --> 0:12:32.000
<v Speaker 1>on a dollar or even less a lot less.

0:12:32.280 --> 0:12:34.600
<v Speaker 2>So I was buying at a ninety nine point seven

0:12:34.640 --> 0:12:38.000
<v Speaker 2>percent discount oil companies in Russia.

0:12:38.040 --> 0:12:40.440
<v Speaker 1>How much did you have to manage at the peak?

0:12:40.640 --> 0:12:41.920
<v Speaker 2>At the peak we had about four and a half

0:12:41.960 --> 0:12:42.880
<v Speaker 2>billion dollars.

0:12:42.600 --> 0:12:45.320
<v Speaker 1>And you're investing in a discount and you're earning really

0:12:45.360 --> 0:12:47.360
<v Speaker 1>good profits. And how many years did you do this for?

0:12:47.960 --> 0:12:51.240
<v Speaker 2>I got there in spring of nineteen ninety six, and

0:12:51.360 --> 0:12:54.520
<v Speaker 2>it was all going all very very well. In November

0:12:54.559 --> 0:12:57.120
<v Speaker 2>of two thousand and five, I was coming back from

0:12:57.200 --> 0:13:00.880
<v Speaker 2>a business trip to London and I was stopped at

0:13:01.200 --> 0:13:05.160
<v Speaker 2>Schermettivo Airport and I was arrested, and I was kept

0:13:05.200 --> 0:13:08.200
<v Speaker 2>overnight at the airport's detention center and then deported the

0:13:08.240 --> 0:13:11.120
<v Speaker 2>next day and declared a threat to national security?

0:13:11.559 --> 0:13:14.040
<v Speaker 1>And why were you declared a threat to nation security?

0:13:14.520 --> 0:13:16.320
<v Speaker 2>In this time that I was investing, One of the

0:13:16.320 --> 0:13:18.920
<v Speaker 2>things I discovered was that the reason everything was so

0:13:19.080 --> 0:13:24.280
<v Speaker 2>cheap was because these companies, you might have owned a

0:13:24.320 --> 0:13:26.120
<v Speaker 2>share of a company, but you didn't really have a

0:13:26.160 --> 0:13:28.559
<v Speaker 2>share of the profits, because all the profits were being

0:13:28.600 --> 0:13:32.200
<v Speaker 2>stolen out the back door by the oligarchs who controlled

0:13:32.240 --> 0:13:36.120
<v Speaker 2>these companies. And so I started to try to figure out,

0:13:36.120 --> 0:13:38.319
<v Speaker 2>how do I stop these guys from stealing from the companies.

0:13:38.360 --> 0:13:40.920
<v Speaker 2>I was investing in. I was very good at doing research,

0:13:40.960 --> 0:13:44.439
<v Speaker 2>and I had a really great bunch of Russian, smart

0:13:44.520 --> 0:13:47.160
<v Speaker 2>Russians working for me who could figure out all the

0:13:47.160 --> 0:13:49.760
<v Speaker 2>stealing that was going on, and they did really beautifully.

0:13:50.640 --> 0:13:52.360
<v Speaker 2>And then I would take that research and I would

0:13:52.360 --> 0:13:54.920
<v Speaker 2>share it with the international media, with the Financial Times,

0:13:54.960 --> 0:13:57.440
<v Speaker 2>with the Wall Street Journal and so on. Normally, if

0:13:57.440 --> 0:13:59.079
<v Speaker 2>you put out some bad thing of companies doing, the

0:13:59.080 --> 0:14:01.080
<v Speaker 2>share price goes down. But these share prices were so

0:14:01.200 --> 0:14:03.200
<v Speaker 2>low that you put out their bad stuff and people

0:14:03.240 --> 0:14:05.319
<v Speaker 2>are saying, well, maybe they'll steal a little bit less,

0:14:05.520 --> 0:14:08.240
<v Speaker 2>and the share price has started to rise. Obviously, the

0:14:08.280 --> 0:14:09.880
<v Speaker 2>people who were on the other side of these things,

0:14:09.920 --> 0:14:12.800
<v Speaker 2>the people who were benefiting from these frauds that I

0:14:12.880 --> 0:14:16.760
<v Speaker 2>was then exposing, were getting pretty mad. And I've been

0:14:16.800 --> 0:14:20.960
<v Speaker 2>doing this for ten years and they finally had enough,

0:14:21.160 --> 0:14:22.760
<v Speaker 2>and that's what led to my exposure.

0:14:22.840 --> 0:14:25.360
<v Speaker 1>So you're doing this, you're making money for your investors

0:14:25.400 --> 0:14:29.920
<v Speaker 1>and presumably yourself as well. Putin is not happy, has

0:14:29.960 --> 0:14:34.000
<v Speaker 1>you arrested. And then after you're arrested in the airport

0:14:34.160 --> 0:14:36.840
<v Speaker 1>in Russia, they send you out of the country and

0:14:36.880 --> 0:14:38.640
<v Speaker 1>they say you can't come back. Is that right?

0:14:38.920 --> 0:14:41.960
<v Speaker 2>That's right. They could have killed me, they could have

0:14:42.000 --> 0:14:45.040
<v Speaker 2>imprisoned me, or they could have deported me. And this

0:14:45.200 --> 0:14:48.120
<v Speaker 2>was back in two thousand and five. Putin didn't have

0:14:48.160 --> 0:14:51.200
<v Speaker 2>the same degree of self confidence he has today. That

0:14:51.320 --> 0:14:53.160
<v Speaker 2>was the largest foreign investor in their country. I think

0:14:53.240 --> 0:14:55.880
<v Speaker 2>killing me would have been a step way too far.

0:14:56.360 --> 0:14:59.000
<v Speaker 1>As soon as you got out of the country, I

0:14:59.000 --> 0:15:01.720
<v Speaker 1>assume kissed the ground you got back in London. But

0:15:01.800 --> 0:15:04.120
<v Speaker 1>then you told your employees to get out the country

0:15:04.160 --> 0:15:04.600
<v Speaker 1>right away.

0:15:04.800 --> 0:15:06.480
<v Speaker 2>I called them up and said, you know, pack your

0:15:06.480 --> 0:15:10.280
<v Speaker 2>bags tonight and bring your families. And I got all

0:15:10.320 --> 0:15:13.120
<v Speaker 2>my people out. And then once they were out, I said,

0:15:13.280 --> 0:15:15.520
<v Speaker 2>the next thing they could do is try to steal

0:15:15.560 --> 0:15:18.800
<v Speaker 2>our money and we I said, we need to liquidate everything,

0:15:18.920 --> 0:15:21.200
<v Speaker 2>and we were able to successfully sell everything.

0:15:21.400 --> 0:15:24.160
<v Speaker 1>As we talk today. I think the US government has

0:15:24.200 --> 0:15:27.160
<v Speaker 1>not nor have the European governments agreed to do that.

0:15:27.720 --> 0:15:29.400
<v Speaker 1>I think the US government has been willing to use

0:15:29.440 --> 0:15:32.280
<v Speaker 1>the interest on that money, but the Europeans haven't quite

0:15:32.320 --> 0:15:33.040
<v Speaker 1>agreed to that yet.

0:15:33.080 --> 0:15:35.320
<v Speaker 2>So everybody's using the interests in that money. They're using

0:15:35.360 --> 0:15:36.000
<v Speaker 2>it for defense.

0:15:36.000 --> 0:15:39.400
<v Speaker 1>It's being used by the countries that are providing support

0:15:39.480 --> 0:15:42.560
<v Speaker 1>to Ukraine. They're using the interest off of that money.

0:15:42.720 --> 0:15:45.200
<v Speaker 1>It's about roughly three hundred billion dollars if there is

0:15:45.280 --> 0:15:48.680
<v Speaker 1>a settlement. Can you imagine that Putin would ever settle

0:15:48.960 --> 0:15:51.360
<v Speaker 1>and allow that three hundred billion dollars in principle not

0:15:51.400 --> 0:15:52.600
<v Speaker 1>to come back to Russia.

0:15:52.720 --> 0:15:54.840
<v Speaker 2>No, under no circumstances would you allow that. Which is

0:15:54.840 --> 0:15:56.240
<v Speaker 2>why we should be confiscating that.

0:15:56.240 --> 0:15:59.080
<v Speaker 1>Well, we have custody of that money, but the idea

0:15:59.120 --> 0:16:02.360
<v Speaker 1>of confiscating that is a bit of a difficult cause

0:16:02.400 --> 0:16:04.640
<v Speaker 1>you're working on it, but it's not easy to get

0:16:04.680 --> 0:16:05.160
<v Speaker 1>done right.

0:16:05.480 --> 0:16:07.400
<v Speaker 2>Well, everyone said the same thing about the Magniskia Act.

0:16:07.560 --> 0:16:09.160
<v Speaker 2>Everyone said, there's no way you're ever going to make

0:16:09.200 --> 0:16:12.160
<v Speaker 2>that happen. Don't even try. I'm one hundred percent sure

0:16:12.440 --> 0:16:15.800
<v Speaker 2>that we will get these countries to confiscate that money

0:16:15.840 --> 0:16:18.120
<v Speaker 2>for a very simple reason, which is it's either us

0:16:18.120 --> 0:16:20.640
<v Speaker 2>paying for it or it's pudent paying for it.

0:16:20.680 --> 0:16:23.680
<v Speaker 1>Not too long ago, there was another prominent American who

0:16:23.920 --> 0:16:27.320
<v Speaker 1>was something from Oklahoma who invested a fairmount in Russia

0:16:27.360 --> 0:16:30.120
<v Speaker 1>and he was imprisoned in Russia for some time. I

0:16:30.120 --> 0:16:33.520
<v Speaker 1>think he's now been freed. Is he doing anything similar

0:16:33.520 --> 0:16:34.160
<v Speaker 1>to what you're doing?

0:16:34.320 --> 0:16:36.280
<v Speaker 2>The only thing similar to me that he's done is

0:16:36.280 --> 0:16:38.120
<v Speaker 2>he's written a book. He wrote a book that's come

0:16:38.120 --> 0:16:40.680
<v Speaker 2>out recently, which I haven't read yet, but I look

0:16:40.720 --> 0:16:43.120
<v Speaker 2>forward to reading about his time. He actually spent some

0:16:43.120 --> 0:16:45.600
<v Speaker 2>time in prison, which I think was pretty unpleasant.

0:16:45.600 --> 0:16:48.760
<v Speaker 1>You did something that probably will be famous for more

0:16:48.800 --> 0:16:51.440
<v Speaker 1>than anything else you've done, which is the act we

0:16:51.560 --> 0:16:55.680
<v Speaker 1>talked about the Magnivskiak. Can you just explain, was Magnitsky

0:16:55.840 --> 0:16:58.320
<v Speaker 1>looking for something for you at the time that he

0:16:58.400 --> 0:16:58.960
<v Speaker 1>was in prison?

0:16:59.240 --> 0:17:00.680
<v Speaker 2>They said, I was kicked out of Russia in two

0:17:00.720 --> 0:17:04.640
<v Speaker 2>thousand and five. We liquidated everything and got our people out,

0:17:06.040 --> 0:17:09.399
<v Speaker 2>but except for one person, had a secretary just sitting

0:17:09.400 --> 0:17:12.040
<v Speaker 2>in the empty office in Moscow. And in June of

0:17:12.080 --> 0:17:14.480
<v Speaker 2>two thousand and seven, my office is my office in

0:17:14.520 --> 0:17:17.760
<v Speaker 2>Moscow was raided by twenty five police officers and they

0:17:18.240 --> 0:17:20.720
<v Speaker 2>seized from the law firm all the stamps, seals, and

0:17:20.720 --> 0:17:23.600
<v Speaker 2>certificates for our investment holding companies, the companies through which

0:17:23.800 --> 0:17:25.520
<v Speaker 2>we had invested all this money, which were empty at

0:17:25.520 --> 0:17:27.920
<v Speaker 2>this point because we'd sold everything. And the next thing

0:17:27.960 --> 0:17:32.280
<v Speaker 2>we know, we no longer own these investment holding companies.

0:17:33.000 --> 0:17:38.000
<v Speaker 2>They'd been fraudulently reregistered using the documents seized by the police. Now,

0:17:38.000 --> 0:17:40.199
<v Speaker 2>I had no economic stake at this point, because our

0:17:40.240 --> 0:17:42.920
<v Speaker 2>money was safe offshore, and so I go out and

0:17:43.040 --> 0:17:46.119
<v Speaker 2>hire the smartest lawyer I know in Russia at the time,

0:17:46.320 --> 0:17:48.920
<v Speaker 2>a young man named Sergei Magnitski is a Russian citizen

0:17:49.440 --> 0:17:51.120
<v Speaker 2>at the time. When I hired him to do this,

0:17:51.160 --> 0:17:53.720
<v Speaker 2>he was thirty five years old, and I said to Sergei,

0:17:54.080 --> 0:17:56.320
<v Speaker 2>help me figure this out and help me stop whatever

0:17:56.359 --> 0:17:58.199
<v Speaker 2>they're trying to do, because I don't feel good about this.

0:17:58.640 --> 0:18:01.080
<v Speaker 1>He started doing it and then he was arrested. Is

0:18:01.080 --> 0:18:01.480
<v Speaker 1>that right?

0:18:01.760 --> 0:18:04.040
<v Speaker 2>Well, so what he discovered, and this is the crux

0:18:04.080 --> 0:18:06.400
<v Speaker 2>of the whole story, is that the reason that they

0:18:06.440 --> 0:18:10.040
<v Speaker 2>stole our companies was that when I was selling everything,

0:18:10.160 --> 0:18:12.760
<v Speaker 2>we had a billion dollars of profit in that year

0:18:13.320 --> 0:18:15.320
<v Speaker 2>and we paid a tax bill to the Russian government

0:18:15.320 --> 0:18:18.000
<v Speaker 2>of two hundred and thirty million dollars. What Sergei had

0:18:18.000 --> 0:18:21.040
<v Speaker 2>figured out was that the reason they stole our companies

0:18:21.520 --> 0:18:24.120
<v Speaker 2>was to go back to the tax authorities and file

0:18:24.160 --> 0:18:27.600
<v Speaker 2>an amended tax return. And the amended tax return said

0:18:27.720 --> 0:18:30.400
<v Speaker 2>that these companies didn't earn a billion dollars, they earned zero,

0:18:31.320 --> 0:18:33.320
<v Speaker 2>and therefore they wanted the two hundred and thirty million

0:18:33.359 --> 0:18:35.960
<v Speaker 2>dollars of taxes that we had paid to the Russian

0:18:36.000 --> 0:18:40.800
<v Speaker 2>government back refunded to our companies that they had stolen.

0:18:41.320 --> 0:18:43.800
<v Speaker 2>Sergei discovered this crime, a theft of two hundred and

0:18:43.800 --> 0:18:46.000
<v Speaker 2>thirty million dollars of taxes. There wasn't our money, this

0:18:46.160 --> 0:18:50.040
<v Speaker 2>was the Russian government's money, and he filed criminal complaints

0:18:50.400 --> 0:18:53.080
<v Speaker 2>to every different law enforcement agency in Russia. He testified

0:18:53.080 --> 0:18:56.359
<v Speaker 2>against the officials involved, and instead of arresting the people

0:18:56.359 --> 0:18:58.960
<v Speaker 2>who stole the two hundred and thirty million dollars, the

0:18:59.000 --> 0:19:02.280
<v Speaker 2>people who stole the tun thirty million dollars organized to

0:19:02.280 --> 0:19:03.040
<v Speaker 2>have him arrested.

0:19:03.320 --> 0:19:05.480
<v Speaker 1>So one part of the Russian government is stealing from

0:19:05.480 --> 0:19:08.680
<v Speaker 1>another part of the Russian government in effect correct. So

0:19:08.840 --> 0:19:11.080
<v Speaker 1>he's arrested and he's put in jail. Does he get

0:19:11.080 --> 0:19:12.040
<v Speaker 1>out on bail.

0:19:12.359 --> 0:19:14.600
<v Speaker 2>No, They keep him in jail and then they start

0:19:14.680 --> 0:19:16.800
<v Speaker 2>to torture him to get him to a draw his testimony.

0:19:16.960 --> 0:19:18.720
<v Speaker 1>Eventually, what happened to him.

0:19:18.680 --> 0:19:21.359
<v Speaker 2>Well, they kept on torturing him and torturing him, pushing

0:19:21.440 --> 0:19:23.800
<v Speaker 2>him to try to withdraw his testimony. He just kept

0:19:23.800 --> 0:19:26.640
<v Speaker 2>on saying no, no, no. They put him in a cell,

0:19:27.680 --> 0:19:30.639
<v Speaker 2>chained him to a bed, and eight rideguards with rubber

0:19:30.680 --> 0:19:33.200
<v Speaker 2>batons beat him until he died.

0:19:33.880 --> 0:19:35.000
<v Speaker 1>When did you hear about this?

0:19:35.400 --> 0:19:39.560
<v Speaker 2>He was killed on November sixteenth, two thousand and nine.

0:19:39.680 --> 0:19:41.960
<v Speaker 2>I got the news on the morning of November seventeenth.

0:19:42.160 --> 0:19:45.840
<v Speaker 2>It was the most horrifying, heartbreaking, life changing news that

0:19:45.880 --> 0:19:48.320
<v Speaker 2>I could have ever gotten. I made a vow to

0:19:48.359 --> 0:19:50.960
<v Speaker 2>his memory, to his family, and to myself that I

0:19:51.000 --> 0:19:52.840
<v Speaker 2>was going to put aside everything else I was doing,

0:19:53.119 --> 0:19:55.119
<v Speaker 2>and I was going to use all my time, energy

0:19:55.119 --> 0:19:57.240
<v Speaker 2>and resources to go after the people who killed him.

0:19:57.400 --> 0:20:00.119
<v Speaker 1>So did you say to the Russian authorities arrest the

0:20:00.160 --> 0:20:01.800
<v Speaker 1>people that killed them? Or did you go to the

0:20:01.800 --> 0:20:04.879
<v Speaker 1>American authorities and say, let's pass legislation that will prevent

0:20:04.920 --> 0:20:06.119
<v Speaker 1>this from happening in the future.

0:20:06.480 --> 0:20:09.520
<v Speaker 2>Sergei had documented all the stuff leading up to the

0:20:09.600 --> 0:20:12.240
<v Speaker 2>night of his death in the form of four hundred

0:20:12.240 --> 0:20:16.480
<v Speaker 2>and fifty criminal complaints that he wrote and filed, documenting

0:20:16.600 --> 0:20:19.679
<v Speaker 2>every last detail of the abuse. Once a month or so,

0:20:19.720 --> 0:20:21.440
<v Speaker 2>he would write these out by hand. He would hand

0:20:21.480 --> 0:20:23.240
<v Speaker 2>them to his lawyer. His lawyer would file them, we

0:20:23.280 --> 0:20:26.160
<v Speaker 2>would get copies. And so the first thing I did

0:20:26.160 --> 0:20:28.160
<v Speaker 2>after he was killed was. I gave all that, gave

0:20:28.240 --> 0:20:32.000
<v Speaker 2>this information to one of the opposition newspapers in Russia

0:20:32.000 --> 0:20:34.760
<v Speaker 2>and they published it, and it was created a huge

0:20:34.760 --> 0:20:37.800
<v Speaker 2>stir because people were shocked that most people in Russia

0:20:37.840 --> 0:20:40.640
<v Speaker 2>didn't know that there was this whole sort of Stalin

0:20:40.800 --> 0:20:43.400
<v Speaker 2>like thing going on. And we thought that that would

0:20:43.720 --> 0:20:47.439
<v Speaker 2>kind of jolt the Russians into at least prosecuting the

0:20:47.480 --> 0:20:51.359
<v Speaker 2>low level people, not the instigators. But that didn't happen

0:20:51.359 --> 0:20:55.680
<v Speaker 2>at all. There was a total conspiracy of cover up

0:20:56.119 --> 0:20:57.960
<v Speaker 2>and every different branch of the Russian government.

0:20:58.080 --> 0:21:00.919
<v Speaker 1>So the Russian government did nothing. You event decided to

0:21:00.960 --> 0:21:03.240
<v Speaker 1>try to do something in the United States. What was that?

0:21:03.640 --> 0:21:06.080
<v Speaker 2>And so I went to Washington and I shared the

0:21:06.080 --> 0:21:11.080
<v Speaker 2>story of Sergei Magnitski with two senators, a Democrat from Maryland,

0:21:11.520 --> 0:21:16.119
<v Speaker 2>Senator Benjamin Carden and Republican from Arizona, the late John McCain.

0:21:17.080 --> 0:21:18.880
<v Speaker 2>And I told them the story of what happened to Sergei,

0:21:19.359 --> 0:21:22.000
<v Speaker 2>and I said, can we freeze their assets and ban

0:21:22.119 --> 0:21:26.040
<v Speaker 2>their visas? And these two senators said yeah, And that

0:21:26.080 --> 0:21:27.480
<v Speaker 2>became known as the Magnitski Act.

0:21:27.880 --> 0:21:29.880
<v Speaker 1>So this law passed what year.

0:21:30.119 --> 0:21:34.600
<v Speaker 2>Twenty twelve now exists in thirty five countries, and most significantly,

0:21:34.640 --> 0:21:36.920
<v Speaker 2>it doesn't just apply to Russian human rights of users.

0:21:36.960 --> 0:21:39.240
<v Speaker 2>It applies to human rights of users anywhere in China

0:21:39.280 --> 0:21:41.400
<v Speaker 2>and Venezuela and Nicaragua wherever.

0:21:41.800 --> 0:21:47.240
<v Speaker 1>So when Russia invaded Ukraine, the United States government froze

0:21:47.280 --> 0:21:52.080
<v Speaker 1>assets of oligarchs who had not been involved in the

0:21:52.119 --> 0:21:57.080
<v Speaker 1>decision to invade Ukraine, but were presumably benefiting from Putin's government,

0:21:57.400 --> 0:21:59.560
<v Speaker 1>and so those assets were frozen. As it under the

0:21:59.600 --> 0:22:01.160
<v Speaker 1>Magnetic Acts, they were frozen.

0:22:01.440 --> 0:22:04.000
<v Speaker 2>I sort of cleared the path for the tool to

0:22:04.040 --> 0:22:06.359
<v Speaker 2>be used. So the Magnitski Act was something that was

0:22:06.359 --> 0:22:09.600
<v Speaker 2>debated very hotly for two years in Washington, and eventually

0:22:09.640 --> 0:22:12.000
<v Speaker 2>we came to this good outcome.

0:22:11.800 --> 0:22:13.920
<v Speaker 1>As you got all of this done, This, no doubt

0:22:13.920 --> 0:22:16.600
<v Speaker 1>would be your great legacy, which is to have this

0:22:16.920 --> 0:22:20.480
<v Speaker 1>policy put in the place. Have you abandoned the investment world.

0:22:20.560 --> 0:22:23.360
<v Speaker 2>I'm no longer managing money for anyone, So it's very

0:22:23.400 --> 0:22:27.360
<v Speaker 2>difficult to be a money manager and be Putin's number

0:22:27.400 --> 0:22:30.000
<v Speaker 2>one foreign enemy full time human rights activist. But I

0:22:30.080 --> 0:22:33.080
<v Speaker 2>still am. I still have my finger in the investment world.

0:22:33.200 --> 0:22:35.720
<v Speaker 1>What is your next mission? Is it to let people

0:22:35.800 --> 0:22:37.480
<v Speaker 1>know more about the things that are going on in

0:22:37.560 --> 0:22:38.479
<v Speaker 1>Russia or other places.

0:22:38.560 --> 0:22:40.680
<v Speaker 2>Well, one of the big things that has happened since

0:22:40.760 --> 0:22:43.639
<v Speaker 2>all these countries have passed the Magnitski Act was the

0:22:43.640 --> 0:22:46.080
<v Speaker 2>invasion of Ukraine. It was terrible for everybody, but for

0:22:46.160 --> 0:22:49.119
<v Speaker 2>me in particular, watching somebody else be victimized by Putin

0:22:49.160 --> 0:22:51.760
<v Speaker 2>in such a dramatic way. And so I wanted to

0:22:51.800 --> 0:22:56.200
<v Speaker 2>be helpful to the Ukrainians. And about a week after

0:22:56.200 --> 0:22:59.960
<v Speaker 2>the war started, the West froze three hundred billion dollars

0:23:00.080 --> 0:23:03.280
<v Speaker 2>of central bank reserves belonging to the Russian government. And

0:23:03.320 --> 0:23:05.560
<v Speaker 2>so one of the conclusions I came to really quickly

0:23:05.640 --> 0:23:08.159
<v Speaker 2>is that money should be used for the defense and

0:23:08.200 --> 0:23:10.960
<v Speaker 2>reconstruction of Ukraine. And so for the last three and

0:23:10.960 --> 0:23:13.840
<v Speaker 2>a half years, I've been using the same networks, the

0:23:13.840 --> 0:23:16.840
<v Speaker 2>same politicians, the same government officials, the same everybody who

0:23:16.880 --> 0:23:19.439
<v Speaker 2>I'd worked with on the Magnitski Act to try to

0:23:19.440 --> 0:23:22.040
<v Speaker 2>convince them to confiscate that money to give to Ukraine.

0:23:22.119 --> 0:23:24.480
<v Speaker 1>As you look back on your life, do you wish

0:23:24.560 --> 0:23:25.959
<v Speaker 1>you had done something different?

0:23:26.320 --> 0:23:29.320
<v Speaker 2>Yeah? People often say, you know, what would you do differently?

0:23:29.320 --> 0:23:32.119
<v Speaker 2>And the answer is, when I finished Stanford, if I

0:23:32.119 --> 0:23:35.399
<v Speaker 2>had stayed out in California. You know a lot of

0:23:35.400 --> 0:23:38.200
<v Speaker 2>people wouldn't have died, and you know I probably would

0:23:38.200 --> 0:23:41.520
<v Speaker 2>probably be doing just as well. This tragedy has given

0:23:41.560 --> 0:23:44.040
<v Speaker 2>me a mission in my life, meaning and I've done

0:23:44.040 --> 0:23:45.919
<v Speaker 2>a lot of things to help a lot of people,

0:23:45.960 --> 0:23:50.040
<v Speaker 2>which does give me some joy in spite of the dangers.

0:23:51.640 --> 0:23:54.159
<v Speaker 1>Thanks for listening to hear more of my interviews. You

0:23:54.200 --> 0:23:58.320
<v Speaker 1>can subscribe and download my podcast on Spotify, Apple, or

0:23:58.320 --> 0:23:59.160
<v Speaker 1>wherever you listen.