Transcript: Bill Browder




The transcript from this week’s, MiB: Bill Browder on Finance, Murder and Justice, is below.

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VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, strap yourself in, this is just astonishing. Bill Browder, Founder, CEO of Hermitage Capital Management and the author of “Red Notice: A True Story of High Finance, Murder and One Man’s Fight for Justice” has a new book out about what’s been going on with the Russians and the Magnitsky Act that he helped to pass in order to get justice for his Russian attorney who was tortured and murdered by the Russian government while in their custody in prison.

This is just really astonishing stuff. I read all of “Red Notice.” It was like a spy novel. You plowed right through it on the weekend. And then I did the same thing with “Freezing Order” which is what’s taking place in the five years since “Red Notice” came out.

So, I felt like I knew everything he was going to say and even still, he astonished me. I spoke to him for nearly two hours. Most of the time, my job was on the desk. I just was shocked at how just barbaric and you can even call it corrupt. It’s just next level illegality that seems to take place in Russia.

Browder describes that nation as a country that doesn’t have laws. It’s the wild west and it is, as he describes it, a kleptocracy and a fascist state which doesn’t sound like it’s the sort of place where anybody would want to live. This is not just bad, it’s bad and getting worse. And he describes both the invasion of Ukraine as a giant distraction by Putin against people who would challenge his rule.

Really, just, I don’t even know what to say, a fascinating, shocking, horrifying conversation. Even if you read both of Browder’s books, you will find something to be amazed at. With no further ado, my conversation with Bill Browder.

So, let’s start out just with a little bit about your background. You have a B.A. in Economics from Chicago and MBA from Stanford. You begin in Salomon Brothers in the 1990s early in your career and you kind of successfully stumble into some privatization of government entities in Poland while you’re at Salomon. Tell us a little bit about that early experience.

BILL BROWDER, FOUNDER, CEO OF HERMITAGE CAPITAL MANAGEMENT: Well, I should just back up one step further which is a little bit on my family background which is what got me interested in all this European stuff.

My grandfather was an American communist who is head of the American Communist Party from 1932 to 1945. And so, in my teenage years (ph) I decided to become a catalyst. I went to Stanford Business School as you mentioned and I finished business school in 1990, the 1989, the year where the Berlin Wall came down, and I thought to myself that my grandfather was the biggest communist in America and the Berlin Wall has come down, I’m going to become the biggest capitalist in the Eastern Europe.

And so, I ended up in London on the East European desk of Salomon Brothers and this was right around the time that all of the countries of Eastern Europe were privatizing. And my very first experience was actually before I joined Salomon Brothers, I had another job at the Boston Consulting Group. They sent me out to Poland in — to work on a failing Polish bus factory and I noticed my interpreter had a newspaper under his arms with a bunch of financial figures. I asked him what those were and he said, these are the very first Polish privatization.

And I was kind of intrigued and so I said, can we discuss it, and he laid it out on a conference table and I said, what’s this number? He said, this is the number of shares outstanding of this one company that’s been privatized, and I said, what’s this number, he said the share price and multiply the two numbers together and that got you to a market cap of this company of $80 million.

And then I said, what’s this number down here, and he said, this is last year’s earnings. I said, no, that couldn’t be right. So, I said, can you just retranslate it, and he said, last year’s earnings. And that number was $160 million.

So, here’s company that’s valued at $80 million, the previous year’s earnings were $160 million. So, it’s trading at one half — a PE of one half. And I thought, well, isn’t this what I went to business school for? Like investing in this kind of stuff and I had total life saving for the time of $2,000 and I converted my total life savings of $2,000 into Polish zloty, their currency, went down with my translator to the post office and subscribed to the very first privatization in Poland.

And over the course of the next 12 months, it went up 10 times. That’s my 2,000 turning to 20,000. And there’s a certain feeling that you get if you make 10 times your money. Like the financial equivalent of crack cocaine and I just wanted to repeat the experience. And so I now knew I wanted to do with my life. I didn’t want to be a consultant. I want to be investing in this privatization in Eastern Europe. And that’s what led me eventually to Salomon Brothers and I was working on their proprietary trading desk and that’s when I discovered Russia.

RITHOLTZ: Yes. The story in the book is quite fascinating how really Salomon Brothers is a shark tank. They throw everybody in the pool. You either sink or swim. And you kind of stumbled into Russia by accident. They were not especially supportive until you found one champion who managed to get you a nice pool of capital to invest. Tell us how that progressed

BROWDER: So, what happened was my very first assignment at Salomon Brothers was to advise a management of fishing fleet in Murmansk on their privatization. And so, I fly up to Murmansk which is 200 miles north to the Arctic Circle, most farthest north place in the world. I go up there and the head of the fishing fleet meets me at the airport. He takes me down to the docks and he shows me one of their ships and this ship was like 400 feet long, it was five storeys. On the top storey, they collect — they have nets where they caught the fish and they separate them and they work their way down. And eventually, at the bottom storey of the boat, they have canning machines.

And so, it wasn’t just a fishing boat, it was an oceangoing factory, very impressive. And asked them, how much does one of these things cost, and they said, $20 million new. How many do you have in your fleet? A hundred. So, I did the math, 20 million times a hundred. It is $2 billion on the ship. I said, what’s the average age of your fleet? They said, seven years.

So I don’t know much about shipping or fishing or anything but I figured that makes it maybe half depreciated. So $1 billion for their ship. This guy just hired me, the management of this trawler fleet to advise them on whether the management should exercise their legitimate right under the privatization program of Russia to buy 51 percent. And so, I said, at what price does the government selling you 51 percent and he said, $2.5 million.

So, let me just repeat the math. A billion dollars for the ship, a 51 percent for $2.5 million and that’s when I realized that something really crazy was going on in Russia. And if that situation in Poland had gotten my juices flowing, my God, this is even crazier. And so then I went to Moscow. I thought — I said to myself, if this is something some weird anomaly with the fishing industry or is this something going on more widespread, I went to Moscow and as I was going to the airport in Moscow, they were selling a little English-language yellow page directory.

And so, I didn’t know anyone in Russian, I didn’t speak the language. And so, I bought this English-language yellow page directory and I just started calling people who might be able to explain to me what was going on and over the course of the week, I had about 40 meetings and met all different types of people and I was able to figure out what was going on more widespread and this was the most incredible thing I’ve ever seen in my professional life.

Basically, they — the — in order to go from communism to capitalism, the Russian government had given every citizen in the country a thing called a voucher, physical certificate called voucher, and at that time, there’s about 150 million people in the country and these vouchers were freely tradable. So, you could buy them, you could sell them, you could burn, you could trade them. You can do anything you want with them.

And so, the vouchers developed sort of secondary market and may trade it for about $20 each. And so, again, I went through this simple math. So, it’s 150 million voucher times $20 gives you a $3 billion of vouchers in circulation and this $3 billion of vouchers in circulation were exchangeable for 30 percent of the share capital of all Russian companies, which meant that the market cap of the entire country of Russia, every asset in the country, was $10 billion.

And this is a country with 35 percent of the world’s natural gas, 10 percent of the world’s oil, 10 percent of the world’s aluminum, steel, fertilizer, car companies, telephone companies, electricity companies, banks, et cetera. The entire country, $10 billion. At that time, you couldn’t buy a midsized Oklahoma oil company for $10 billion. Here, you could buy the whole country of Russia.

So, I rushed back to Salomon and I said, guys, we got to stop everything else we’re doing and we got to invest in Russia. They’re like literally giving money away for free. And the moment I mentioned Russia, people like just immediately just switched off.


BROWDER: And I wasn’t very good — I wasn’t very good at politics inside an organization. So, if one person said no, I just had launched with an expert, I was wide-eyed and crazy, I said, we got to stop doing everything and invest in Russia.

And by the time I was done, I had completely burned my reputation with everybody in the whole company even the young guys who I was hanging out with stopped inviting me to lunches and drinks because nobody wanted to be seen with that crazy guy who’s obsessed with investing in Russia.

And Salomon was a place where if you didn’t earn five times what they’re paying you within a year —

RITHOLTZ: You’re out.

BROWDER: — you’re fired and I wasn’t earning anywhere near five times anything and I was going to be fired. So, not only was I not going to be able to invest all this great stuff in Russia, I wouldn’t be able to pay my rent. And so, I was just sitting there just totally demoralized and one day, my phone rang and it was the most — one of the senior guys in New York office of Salomon Brothers, I’m in London, and he said, I hear you might be having some career troubles but you got something interesting to say about Russia, can you come over and explain to me what’s going on.

And so, I spent like couple days all night putting together the best PowerPoint presentation I could come up with explaining how cheap everything was in Russia. I go over to Salomon. I sit down with this guy. I take him through the presentation and he’s not a very sort of friendly or communicative guy and he just stares blankly to me as I’m going through this presentation and the halfway through the presentation, he just gets up and leaves. And I thought to myself, I’d like blown my chance in saving my career.

And I’m sitting there tapping my foot trying to figure out how I’m going to retrieve this meeting when he comes back and he’s gone for 10 minutes ,20, 30, 40. He comes back like 52 minutes later and I’m about to blurt something out to try to save the meeting. But before I have a chance to say anything, he said, I just — the slides you showed me are the single most impressive thing I’ve ever seen in my investment career.


BROWDER: I just gone the risk management committee. I got you $25 million to invest in Russia. I want you to stop doing everything else you’re doing and get over there and get those money invested. This is unbelievable. And that’s what — that’s what set me off of my career investing in Russia.

! Wow. Amazing story. So, now, you set up these funds and it does really well and you circled back to Sallie and say, hey, let’s really expand this, and suddenly, everybody wants a piece of you. Tell us a little bit about that.

BROWDER: So, I go in — so, this guy gets set me up to Russia, invested $25 million and for a while, I was doing nothing, it’s just sitting there, totally tiny little illiquid market. Nobody knows anything about it and I just started sitting there. And invests this money in like the fall and going into like December of 1993.

And then 1994, “The Economist” magazine in England writes an article called “Sale of the Century” in which they described the same math that I just shared with you and all of a sudden, it’s in the — now it’s in black and white in ink, it’s just people reading it. And all of a sudden, about 20 serious like major western investors, hedge fund managers, billionaires, proprietary trading desks, all say — all in unison say, wow, how come I didn’t know — why didn’t I know about this, we got to get involved.

And so, when you take 20 huge investors and you try to go into a tiny illiquid, almost untraded market and all at once try to buy it, what happens? Share price goes up. And so, in the course of a couple of weeks after this “Economist” article, the Russian stock market goes up 500 percent and our $25 million turns into $125 million.


BROWDER: And I’ll just point out that this was back in the days when $100 million profit is real money.


BROWDER: And so, all of a sudden, I go from a total zero to like hero on the trading floor and all those guys who had stopped inviting me to lunches and drinks were all camped out around my desk when I arrive in the morning, all just guesswork for tips on how they can make five times their money on the Russian stock market.

And all of a sudden, some of the older fellas start coming around to my desk and old at Salomon was like 40 years. You couldn’t survive past 40 without having a heart attack or something like at Salomon. So 40 was like the maximum age.

But I was in my late 20s. So, these older guys would come around and Salomon is a very disrespectful place and people were not very nice to each other. But they’d come by very deferentially saying, excuse me, Mr. Browder, I know you’re very busy but is there any chance I could convince you to come and spend a few minutes to brief my client, Mr. Soros. He would be so grateful for just a tiny bit of your time.

I have another guy came by, Sir John Templeton, the Founder of Templeton, he’d be so appreciative if you could just be with him for a little bit of your time. And I was getting these invitations to like the royalty of Wall Street. Everybody wanted to meet me because nobody knew anything about investing in Russia. Here is this one guy and we knew, in the land of the blind, the one-eyed man is king.


BROWDER: And so, I went on this world tour of royalty of Wall Street and they were much smarter than my colleagues at Salomon and within moments when I show them the data, they were saying, this is unbelievable. Can we give you some money to manage?


BROWDER: I said, I don’t know. At the moment, we’re just doing this for ourselves but let me go back to the bosses and see what I can do for you. And so I got back to the head of the trading floor in London and I say, I was just with George Soros and he wants to give us some money to manage, what do you think? And the guy says, I think that’s a brilliant idea. Let’s form a task force to study it, and I said, okay.

So, the first task force meeting was a week later. I show up in this room and there’s like 40 people in this room like 35 of them I’ve never seen in my life before. There was the vice chairman of the company, the senior managing directors, managing directors, senior directors, directors, vice presidents and me, I was the lowest ranking guy in the whole room.

And within moments of the meeting starting, a fight broke out among all these different people about which — who was going to get the economic credit for the business and investment bankers have an unbelievable skill and capacity for making plausible arguments for why they deserve money that they don’t deserve. And these people, I was just — I was watching them, it was like — there’s like multidimensional tennis it’s like been. Asset management group had made an argument and then the investment bank says, he works here, and then the emerging market people say, what about us, and it was going on and on.

And I didn’t know who was going to win this argument but I was 100 percent sure of who wasn’t get in the economic credit for the business and that was going to be me. And so, I – after three days of like not being able to sleep, I walked into the head of the trading floor, I gave him my security badge and I said, I’m quitting, I’m going to start my own fund and I went — I moved to Moscow, that was early 1996 and set up what was — became the Hermitage Fund.

He told me, you’re never going to succeed, but off I went. And I ended up getting — I went back to one of the guys from those meetings I went in Wall Street. It was a guy named Edmond Safra who is the owner of the Republic National Bank of New York and he was one of the largest and most successful private bankers in the world. He gave me $25 million to invest. We started the fund and just went like unbelievably up within moments of starting.

RITHOLTZ: Amazing. Really quite amazing. So, it’s a fascinating story but it raises so many interesting questions starting with the companies you’re investing in in Russia. Are these all formally state-owned companies sort of the way things are operating in China today? Did they still retain any sort of state ownership and who were the private owners of these firms?

BROWDER: So, what would happen is in most cases, the companies became completely privatized and the people who own them, and these are big companies and you’ve heard of these companies, Lukoil, Sparebank, Gazprom, through good (ph) natural gas.


BROWDER: These are companies that anyone who had traded Russian stocks would know the names of these companies. Big stake — big formally stake companies. Most of them were fully privatized and the people who became the majority shareholders were these people who we now know as the oligarchs, a couple of them, like Gazprom and SpareBank remained on partially state-owned or in some cases, majority state-owned but the shares the 49 percent would trade on the stock market.

But the big problem that we discovered, and this was one of the reasons everything was so cheap, was that you might have owned a share of a Russian company but you didn’t really have a share of anything because the oligarchs or in some cases, the corrupt managers were basically stealing all the money out the back door. There was — you might have had a share of the company but you have no share of economics because they were just literally stealing billions in every possible way you can imagine.

The kind of corruption that we got to see with our own eyes was just mind-boggling. It was the biggest theft in the history of the world. It was being done out of these companies and it’s a company that’s generating tens of billions of dollars of profit. But if you look at the financials, they were nonprofit.

And so, it presented a terrible dilemma for me because I got out to the world and convinced all sorts of famous people to come and invest with me. I showed them all these graphs and charts how cheap everything was and it was on paper but it wasn’t in reality because these guys were just stealing all the money out the back door. And it was — it created a real problem and it was also really infuriating like why would these — and it’s mostly these oligarchs doing it. Why would these people feel so entitled that they could do that and just — at the expense of everybody else?

RITHOLTZ: Cheap for a reason, right? So, that raises the question Russia is a unique place. Corruption is endemic. It’s well known for a century. It’s not the sort of geography that you really think of when you think of shareholder activism. What led you to that sort of approach in that sort of place?

BROWDER: Well, so, it was a combination of circumstances. So, I started out at $25 million of staffers money and then it started going up and up and up and this was a hedge fund structure where you could put your money in at any point in time and everybody said, my God, this is unbelievable. So, they sort of adding more and more money to the fund.

And by 1998, I had more than $1 billion invested in the Russian stock market, which was — this was a tiny little market so $1 billion was like the —

RITHOLTZ: Your money.

BROWDER: I was like the equivalent of Fidelity in Russia in terms of like the size of assets. And then all of a sudden, and for anyone listening to this who’s my age or near, 1998 happened. This was the year that Russia defaulted and devalued their currency. And so, they defaulted on the domestic bonds. The currency devalued by 75 percent and my portfolio, which was above $1 billion, went down 90 percent.

And so there I was nursing a 90 percent loss. I lost $900 million with my client’s money and these are the people that I got around and tried to convince to invest in Russia. I went around meeting all sorts of people over the world. Every 20 people I would meet, 19 said, no, you’re crazy, I’m not going to give you any money, and one person would say yes. And that one person who’s with me who was like — who had given me their confidence, I’d lost 90 percent of their money and I was just mortified.

And I was totally, totally ashamed of myself that I had been so emphatic saying what a great opportunity this was and I lost people so much money. And I just — I couldn’t look at myself in the mirror unless I did something to try to get their money back. And so, as I was trying to get their — so I was sitting with my last 10 cents on the dollar. The market had crashed and the oligarchs, this is a particularly poignant moment in their lives, they had up until that time kind of behaved themselves.

Not as much — I mean, there was a lot of stealing going on before this but after this crash, they realized that Wall Street was closed for business for them. They could never borrow a penny on Wall Street. Nobody was ever going to touch them in any way, shape, or form. And that was the only thing that’s sort of moderating their behavior at all.

And so when they saw this — that nobody was returning their calls from Goldman Sachs and Morgan Stanley who had been all wining and dining them a year before ,they said to themselves, if there’s no incentive to behave and there’s never been any disincentive against misbehavior, there’s no law existing in Russia, we might as well steal everything that’s not nailed down and they went from stealing cash flow, which is what they’re stealing before, stealing assets and they were asset stripping and organizing huge dilutive share issues and embezzlement and all sorts of crazy stuff.

And so, I was — they were going to try to steal the last 10 cents on the dollar that I had right at the moment that I was — that I had sort of bowed to try to get that money back. And so, I kind of felt like I was forced into this because I was — I just couldn’t imagine just sort of dusting myself off and leaving and just leaving everybody in such a terrible state among my clients.

And so, I said, okay, well, how do I stop them from stealing and it’s not like you could go to the regulators and say, there’s a stealing going on in my company, could you please investigate because the regulators don’t regulate. You couldn’t go to the courts or the police or the parliament or anything.

Btu the one thing I could do is go to the media. And so, we started to do what I — what is now known as stealing analysis of Russian companies where we would go into these companies and we would do an analysis of like how they’re stealing, who is stealing, what they were stealing, where the money was going.

And you might think that — well, how do you do a stealing analysis in a Russian company and the answer is pretty interesting which is that these companies in the country is just everything is total bureaucracy there. You can even go to the bathroom without — like putting your — writing your name down on the form and then those forms get filed with four different ministries in quadruplicate.

And all that information about everything in the country was effectively for sale. You could basically buy a disc with information about everything. And so, we started buying these discs with all this information and people also weren’t very tightlipped about it. Everybody was really upset that — with all the stealing that’s going on because only a very few people participated it but a lot of people got to see it themselves.

And so, we started to put together these really detailed summaries and analysis of how the stealing was happening and the other big benefit that I had was that all the foreign correspondents, all pretty much hanged out at the same restaurants and bars that I did and so I got to know all these guys and they loved me because here I was showing up with like work that would have taken them three months to do, which I just did myself with my team, I’m showing like these massive that’s going on these big important Russian companies like Gazprom, SpareBank and so on.

And so, I would do these naming and shaming campaigns and they would write up the stories to the “Wall Street Journal” and the “Financial Times” and “”New York Times” et cetera and then the most interesting thing happened, which is that it was just at the same time that Vladimir Putin had come to power and Putin was fighting with the same guys I was fighting with.

When he came to power in year 2000, he wasn’t powerful like he is today. All these oligarchs had basically informally usurped the power of the presidency and he was really keen on getting it back. And so — and I should point out that I’ve never spoken or met Vladimir Putin but I when I would put these exposés out there, it traded this opportunity for him to go after his enemies. And there’s an expression, your enemy’s enemy is your friend.

And so, he would — I would put out a big exposé on Gazprom and then all of a sudden, he’d stepped in and he would fire the CEO of Gazprom leaving the states shares or he would issue a presidential decree about SpareBank or whatever. And this had an unbelievably positive affect on the value of my portfolio.

And so, if you — so basically, remember, I started with $25 million that goes up to $1 billion. It goes down to $100 million. And as a result of the naming and shaming campaigns, it goes from $100 million to $4.5 billion and I became the largest foreign investor in the country.

RITHOLTZ: Wow. So, shareholder activism is usually a pretty bareknuckle sort of strategy and in a country like the United States or even the UK or Europe, there is the rule of law and respect for property rights and regulation and a law enforcement. There is really not a whole lot of that in Russia. At what point do you start to think, hey, I could be really pissing off some pretty powerful and dangerous characters?

BROWDER: Well, I was — on one hand, I was scared to death doing this, literally scared to death and it wasn’t like I was doing this enthusiastically, I was doing this in reaction to the fact that I was — they were going to try to take everything away from me. And when I did it, I hired bodyguards.


BROWDER: In one particular fight that I had, I had literally 15 bodyguards. I had — when I would go from the office to home, I had my car with three armed guys and then there would be three other cars, a lead car, a lag car and a side car and I get home and the lead car would go ahead to get there faster and they would scoop out for snipers and look up the stairwells make sure there’s no bombs and then there would be a guy sitting in my apartment with like automatic weapon loaded sitting in my living room.

It was pretty horrifying and scary and these guys do a lot of terrible things. But the one thing that I had going for me and this was — I mean, it’s kind of a joke but it’s very serious is that in Russia, nobody — everything is a conspiracy. Nothing is as it seems on the surface.


BROWDER: And so everybody look at me and saying there’s no way that some guy from the south side of Chicago, American guy, shows up in Russia and takes on the most powerful and dangerous oligarchs in the country on his own volition. Somebody must be standing behind him. This must be a project.

And everybody looked at the whole pattern and they said, well, okay, Browder does this stuff and then all of a sudden. Putin steps in and it attacks the people right afterwards. This must be — how clever of Putin to come up with this weird strategy. And they were kind of scared of Putin.

And so like they thought — and I wasn’t going to correct them and tell them that I bet this is like totally my doing and has not nothing to do with him. And so, I let them believed that this was some type of Putin project because that gave me some protection, this misunderstanding. And so, here I am now sitting here telling the story. So, nobody got to me. But it was, of course, a very scary thing to do, extremely scary thing to do and everybody is scratching their head and wondering how I can do it and get away with it.

RITHOLTZ: So, you and Putin’s interests appear to be aligned at least in the beginning in the ’90s then a few years go by and suddenly, you’re declared a national security threat. Tell us a little bit about what that experience was like of not being permitted back into the country and denied a visa.

BROWDER: So, Putin had this problem with the oligarchs. They were stealing power from him and he — and so, every time I would be doing this stuff, he come in and do — come down on them. But that wasn’t enough for him. He had to solve this problem once and for all.

And he came up with a plan in late 2003 to solve this problem with the oligarchs and what he did was there was one oligarch in particular who was the richest oligarch. His name was Mikhail Khodorkovsky. At that time, he was worth about $20 billion. He was the owner of an oil company called Yukos.

And so, Putin decided that he was going to win his war with the oligarchs by arresting the richest oligarch. And so, Khodorkovsky is on his private jet. His jet has landed on some airport in Siberia and Putin organizes for his private jet to be surrounded by the FSB, which is the successor organization to the KGB. They surround the jet. They arrest him. They put him on a government plane back to Moscow. They put him in jail and then they put him on trial.

In Russia, when you go on trial, there’s a 99.7 percent conviction rate. And so there’s no presumption of innocence. And so when you’re on trial, they put you in a cage so that’s where you’re going to be when the trial is over. So they put Mikhail Khodorkovsky, the richest man in Russia, on trial in a cage and they allowed television cameras to come in and film him.


BROWDER: And so, imagine, you’re the 17th richest oligarch in Russia, you’re on your yacht that’s parked off the Côte d’Azur in France, you just finished up with your mistress in the bedroom, you got to the living room, you click on CNN and you see a guy far smarter, far more powerful, far better than you sitting in a cage, what’s your natural reaction going to be? You don’t want to sit in that cage.

And so, one by one by one, some oligarchs went to Putin after Khodorkovsky was convicted and sentenced to 10 years and they say to Putin, it’s the summer of 2004, Vladimir, what do we have to do so we don’t sit in the cage, and Putin says, real simple, 50 percent.


BROWDER: Not 50 percent for the Russian government or 50 percent for the presidential ministries of Russia, 50 percent for Vladimir Putin. At that moment in time, 2004, Vladimir Putin became the — becomes the richest man in the world. And at that moment in time, all of my activities exposing the oligarchs were no longer exposing his enemies but exposing his 50 percent personal interest.

And they must have struggled to figure out what to do with me but they figured it out and in early November of 2005, I was flying back to Moscow from London, I have been living in Moscow for 10 years, I was the largest foreign investor in the country and I get arrested at Sheremetyevo Airport by four heavily armed border guards. They take me down to the detention center of the airport. They locked me up overnight and I’m sitting there cursing myself for having been so stupid for doing this and wondering whether I’m going off to Siberia like Khodorkovsky or whether I’m going to be deported.

I was sitting there for 15 hours and then they finally programmed our fleet back onto a Aeroflot flight, stick me in the middle seat and deport me back to London. And I’ll tell you something, I was so, so happy that it was — if you ever watched that movie “Argo” when they —


BROWDER: — take off from Iran, I was so happy that I wasn’t being sent off to Siberia. So, I get back to London and then I get an official letter from the Russian Ministry of Foreign Affairs saying that I’ve been band entry into Russia because I was a threat to national security.

And I was really surprised actually because I thought I’ve been doing them a favor by exposing all those corruptions. But as I figured out, Putin was now the beneficiary of this whole thing.

And so, at this point, I was pretty scared because, okay, yes, being kicked out is not a great thing if you’re specialized in investing in Russia. But when the Russians decide to go after you, they don’t tend to do it mildly. They usually do it with extreme prejudice.

And so, I said to myself, where else to do — where else am I exposed and there is two places where I was exposed. I had a bunch of people who work for me and their family members that they could arrest in Russia and I had a hell lot of money invested in the country. And so, I organized an emergency evacuation with my entire staff, all of the people who work for me and their dependents and I got them all out. I got them all to London. And once I got everybody safely out, we then organized — we quickly and quietly liquidated every last share we held in the country.

RITHOLTZ: So let’s talk a little bit about the raid. Russian officials, while you’re in Paris, decide to read the remnants of what was Hermitage. You would already essentially wound down operations, removed everybody except for one secretary and gotten all of the cash out of Russia. Tell us how this progress. What was this raid about?

BROWDER: So, the ceased these documents, the stamp seals, the certificates for investment holding companies, which at this point were empty. So they ceased these documents and then we discover that the companies no longer belong to us. They had been fraudulently reregistered into the name of the man who had been convicted of manslaughter and let out of jail early. He became the new owner of this — of our empty investment holding companies, which — and the only way he could have done that was in collusion with the police.

And so, at this point, I don’t have any money at stake in Russia because all the money is safely out but I’m terrified not from a financial perspective but from a legal perspective because I know that if the police are working with killers to steal companies, I’m going to be walking through some airport somewhere and I’d be arrested in some future date.


BROWDER: And so, I call up the smartest lawyer I know in Russia. The young man’s name is Sergei Magnitsky. Sergei was, at that time, 35 years old. He worked for an American law firm and he was one of these people who can literally do 10 things of the time it takes another lawyer to do one. He was such a genius, hardworking, unbelievably good lawyer.

And I said to Sergei, I don’t know what’s going on here but I need you to figure it out and I need you to stop it. And so, Sergei goes out and he investigates and he goes and sends letters of requesting information documents to all these different people and he goes to registries and he goes to courts, he goes everywhere. And he comes back and he said, I figured it out. There were two parts of the scam.

He said, the first part of the scam didn’t succeed. The first part of the scam was they wanted to steal all of your money but because I gotten all my money out before they got to us, they didn’t get it. He said, however, the second part of their scam did succeed. What he explained was that after we had liquidated all of our holdings in Russia in the previous year when we got all our money out, we had a profit of a billion dollars and on that profit of a billion dollars, we paid to the Russian government $230 million of capital gains taxed.

What Sergei had learned from his investigation was that after our companies were stolen, the people who stole our companies went back to the tax authorities on 23rd of December 2007 and they said there was a mistake made in the previous year tax filing. Instead of these companies earning $1 billion, they earned zero. That’s what they said. They came up with some complicated way of kind to explain that.

And they said as a result of them earning zero, the $230 million of taxes that was paid in the previous year is paid in error and we’d like that money back. And so, in the 23rd of December 2007, two days before Christmas, they applied for $230 million fraudulent tax refund. It was the largest tax refund in the history of Russia. They applied for it two days before Christmas and it was approved and paid out the next day on Christmas Eve.

RITHOLTZ: Pretty shocking.

BROWDER: Well, I mean, if you — and so, let’s just say you overpaid taxes legitimately by $5,000, you’d 15 years later and you still not get that money back from the Russians.

RITHOLTZ: You don’t think you get it the next day even if it was Christmas Eve. It was like a lovely Christmas present.

BROWDER: $230 million, nearly a quarter of a billion dollars, paid out on a fraud in one day on Christmas eve. So, Sergei and I were looking at this and this was just a monumental discovery and we said to each other, this couldn’t possibly be authorized because this wasn’t my money that was being stolen. This was the Russian government’s money being stolen. We — and we thought Putin, he might be a nasty guy but he’s a nationalist. He’s a patriot. This is his own — this is his own that’s being stolen. He couldn’t have authorized this.

And so we figured that the best way of dealing with it is to bring it to the attention of the highest authorities in Russia as we wrote criminal complaints to the head of the general — general prosecutor of Russia to the head of the Russian State Investigative Committee to the head of the internal affairs, Department of the Interior of Ministry.

I then went to the newspapers and radio, television, telling the story of what had happened. And then Sergei went and gave formal testimony to the Russian State Investigative Committee which is their FBI. And we sat back and we waited for the good guys to get the bad guys. Well, it turns out, that Vladimir Putin’s Russia, there are no good guys.

Five weeks after Sergei testified against the officials, these companies and so on who did the raid, the same people he testified against came to his home on the 24th of November 2008, and arrested him. They put him in pretrial detention where he has been tortured to withdraw his testimony. They put him in cells with 14 inmates and eight beds and has lights on 24 hours a day to impose sleep deprivation.

They put him in cells with no heat and no windowpanes in December Moscow, so he nearly froze to death. They put him in cells in no toilet, just a hole in the floor that the sewage would bubble up. They moved him from cell to cell to cell. And the purpose of all this was to get him to withdraw his testimony against these corrupt police officers and then they wanted to get him just kind of false confession to say that he stole the $230 million and he did so in my instruction.

And Sergei, he looks at them like just like a soft guy. He — here’s a guy who wears gray suits and a white shirt and a red tie and goes to a fancy American law firm and buys Starbucks coffee in the morning, a week of this who buckle. What they — that they completely misunderstood, Sergei Magnitsky, Sergei Magnitsky, Sergei was this man of unbelievable principle and integrity. And for him, the idea of perjuring himself and bearing false witness is more — more painful than the physical pain they were subjecting him to and just refuse.

And as a result of his refusal, they just up — upped enough the pressure and the torture. And after about six months of this, his health started to deteriorate. He started to develop terrible pain to his stomach, couldn’t eat. He lost 40 pounds and he eventually went to the prison doctor and they diagnosed him as having pancreatitis and gallstones and needing an operation which was scheduled for the 1st of August 2009.

A week before the operation, he — the bad guys come to him again, again demand him to sign the false confession. Again, he refuses. And in retaliation, they moved him from the prison where he was which had this medical facility to a maximum security prison in Moscow called Butyrka and Butyrka is considered to be one of the most horrible prisons in Russia. It’s like a medieval prison.

But worse than that, for Sergei, it was that there was no medical facilities there. And at Butyrka, his health completely broke down. He went into a terrible downward spiral, constant agonizing pain, and all medical attention was refused. Even his lawyers wrote 20 different desperate requests to every different branch of the criminal justice system begging for medical attention. And every different letter was either ignored or denied in writing by so many different parts of that criminal justice system.

Things got worse and worse and on November 16th, 2009, Sergei went into critical condition. On that night, the Butyrka authorities didn’t want to have responsibility for him anymore so they put him in an ambulance and sent him to another prison across town that had a medical wing. When he gets to the new prison, instead of putting him in the emergency room, they put him in an isolation cell. They chained him to a bed and then eight riot guards with rubber batons come in to the cell and beat Sergei Magnitsky to death.

He was 37 years old. That was November 16, 2009. Over more than 12 and a half years ago. He left a wife and two children and he was killed.

RITHOLTZ: Unbelievable.

BROWDER: One of the most unbelievable, horrifying, traumatizing, shocking horrific thing I’ve ever had anything to do with in my life. The guy who worked for me was killed because he works for me. He was effectively killed as my proxy.

And when I was finally able to clear the fog of hysteria and heartbreak and shock to think clearly, I made a vow to his memory, to his family and to myself that I was going to put aside everything else I was doing in my life and I was going to devote of my time, all my resources, and all of my energies going after the bastards that killed him to make sure that there’s justice. And for the last 12 and a half years, that’s what I’ve been doing.

RITHOLTZ: So, you had previously discussed how affectively the Russian government had Sergei beaten to death in their custody. At this point, you decide you want — you want payback, you want to make the people who did this pay, tell us how the idea of the Magnitsky Act came about and what was it like shepherding that through Congress?

BROWDER: So, after Sergei was killed, I said to myself, well, how do we get justice? And Sergei had done something unique when he was in jail which is that he wrote everything down that happened to him. Every time they did something bad to him, he wrote a criminal complaints about who did it, what they did, where they did it, what law was violated, when they did it.

And that was his way of dealing with the adversity of being in jail. And so, over the course of his 358-day detention, he had written 450 complaints documenting his mistreatment. And once a month or so, he writes these complains out, once a month or so, he would hand them to his lawyer, his lawyer would then file them, and we would get copies.

And although none of these complaints were ever acted on, we — because we had copies, we had the most well-documented granular, detailed first hand account of human rights abuse that’s ever come out of the Russian system and because these were so articulately written, they made a horrifying case for — Russia was like, this is — this is not — nobody could imagine that this was the Russia, the year of 2009. They thought this was like 1938 during Stalin when you read these letters and complaints.

And we thought that that would be enough to at least have them throw some of the low-level people under the bus. But I was completely wrong. Instead of prosecuting anybody, Vladimir Putin got personally involved, he circled the wagons, he made public statements that nobody had done anything wrong. He exonerated every single individual.

Some of the most complicit people even received state honors and promotions. And in a most unbelievable miscarriage of justice, three years after they murdered Sergei Magnitsky, they put him on trial in the first ever trial against a dead man in the history of Russia.

They put me on trial as his codefendant. We were both found guilty. They couldn’t do anything more than Sergei than they had already done of killing him and sends me to nine years in absentia. It became obvious. Well, before that, that this — that we weren’t going to succeed in getting justice in Russia, so we said, well, how do we get justice outside of Russia?

And this is when I came up with an idea which is that the people who killed Sergei didn’t kill him for ideological or religious reasons as many things happened in the past. They killed him for money. They killed him, very simply, for $230 million.

And the people who stole that $230 million don’t keep that money in Russia. It’s as easily as they’ve stole it, it could be stolen for them. They keep that money in America and in the U.K. They buy fancy apartments in London. They buy houses in South Beach in Miami. They buy villas on the frontline in Saint-Tropez and they send their kids to Swiss boarding school and their girlfriends on shopping trips to Milan.

And so, we — it’s — it will very difficult to prosecute somebody for torture and murder in the west for a crime that was committed in Russia but we certainly don’t have to let them travel to the west or that we could certainly don’t have to let them use our banks from the west and freeze their assets in the west.

And so, that’s when I came with this idea. Freezing their assets and banning their visas. And so, I took this idea to Washington and I met two senators, Senator Benjamin Cardin who’s a Democrat from Maryland and Senator John McCain, a Republican from Arizona, and I shared the story which I just shared with you now and I said, can we freeze their assets and then their visas?

And these two senators were so moved by the story, they said, yes, we can. That’s what we do here in Congress. We can make a law. And they made something called the Magnitsky Act and then so they put this idea of the Magnitsky Act on the books and it was originally just to go after the people who killed Sergei Magnitsky.

But as soon as other people, victims, that heard of this story, they — the phones in these two senators’ offices started lighting up with calls from Moscow and other parts of Russia saying you found the Achilles’ heel of the Putin regime. This is what they do. They commit terrible crimes in Russia and they keep their money in the West. Can you possibly sanction the people who killed my husband, my brother, my sister, my aunt?

And after about a dozen of these calls, these two senators realize they are — that they were understanding much bigger in just one case. And so, they added 65 words to the law to include all human rights abusers in Russia, not just the people who killed Magnitsky.

And all of a sudden, all sorts of victims fanned out across Capitol Hill telling their stories, I was, throughout, telling Sergei story. And in November of 2012, it went for a vote in the Senate and it cast 92-4. The Magnitsky Act passed 92-4. In the House of Representatives, it passed with 89%.

And on December 14, 2012, President Obama signed the Magnitsky Act into the federal law and Vladimir Putin went out of his mind. He got so angry and in retaliation, he banned the adoption of Russian orphans by American families and that they found — that is actually much worse than sounds because the orphans that the Russians put up for adoption were the unhealthy ones. The ones with Down syndrome, with fetal alcohol syndrome, with HIV, with all sort of terrible things.

And Americans would come with open hearts and open arms and take these sick children back to America and nurse them to health. And in Russia, the orphanages didn’t have the resources and these kids would die. And so, basically, Putin was sentencing his own orphans to death as a way of retaliating then to Magnitsky Act.

He then made it his single largest foreign policy priority to try to repeal the Magnitsky Act. And he, he even went so far as of sending his own representative, a female lawyer named Natalia Veselnitskaya to Trump tower after Trump was nominated before he was elected president, 2016, June 9th, 2016, with a specific request, one written — just one simple request that if he becomes president, that he should repeal the Magnitsky Act.

Now, I’m happy to say that it didn’t work. That no Magnitsky Act has ever been repealed. In fact, it was not just not repealed but it was broadened. The Magnitsky Act, in 2016, became the Global Magnitsky Act which doesn’t just go after the people who do terrible things in Russia but in China and Iran and Venezuela and all other countries.

The Magnitsky Act now exists not just in the United States. We got it passed in Canada in 2017, in the U.K. in 2018, in the European Union in 2020, in Australian in 2021. There are now 34 countries that have Magnitsky Acts around the world and this is actually the tool, the template which is being used to go after all the bad guys in Putin’s regime that are involved in the war in Ukraine.

RITHOLTZ: So, let’s put some flesh on those bones a little bit and talk about the dollar amounts involved. So, Sergei discovered a $230 million tax fraud and then courtesy of investigative journalism like the Panama papers and a number of other items, just one bank alone, Danske Bank, in Scandinavia was discovered to have laundered $234 billion, not million, billion in in Russian money. What do you think the total amount of dirty, corrupt stolen money out of Russia adds up to that’s been laundered through Western banks?

BROWDER: Well, so, yes, so one of the big things that after the Magnitsky Act was passed, it was — to figure out where all the money was and so we — that became like my primary life mission was to figure it out. I had a bunch of people working for me and we’ve collaborated with a lot of these journalists and — and we ended up getting a lot of information in different countries and what we discovered was that in order to get the money out of Russia, they never send it directly from Russia, so, like buying apartment in London or France, because the banks of London and France would be suspicious.

And so, what they did was they found these countries that were members of the European Union but were just sort of not up to par with the European Union as far as honesty and laws. And the countries that were really sort of fit that category were these three countries, the Baltics, Estonia, Latvia, and Lithuania, and Cyprus.

And as we’ve started digging and digging and pulling of threads and getting more data and leaks and working with journalists, we discovered that 200 million of the 230 million that was stolen had all gone to one bank, the Estonian branch of Danske Bank, a Danish Bank, all gone through this one branch and we had all these great data and these journalists that we were working, that we knew in Denmark were really interested in the data we had because it identified the names of the holding companies and the account numbers and all those kind of stuff because they had a huge database themselves called the Russian Laundromat database.

But they couldn’t make sense of a database but they had — they could if they could take our analysis of the 200 million. So, they get our analysis. They got our — all our analysis and they compare it to this big, sort of unstructured database they have, this Russian Laundromat and they come back and say, actually, it wasn’t 200 million, but it’s 8.5 billion that was laundered through this bank.

So, they write a story and it was just like a blockbuster story and it was a particular blockbuster story because Denmark is supposed to be like this honest country. If you look at the Transparency International Index, it’s supposed to be the second most honest country in the world after New Zealand.

And so, here you got the Danish bank, the major bank of Denmark laundering 8.5 billion of dirty Russian money. And at this point, the CEO of the bank, he can’t just sit back and do nothing. And so, he orders, like, full external investigation of everything that went on his bank and they bring in accounting firms and law firms and data analytics firms and so on and they finish their analysis and they discover it wasn’t just 8.5 billion, as you mentioned, it was 232 billion of money was laundered to this bank.

And so, here I am, I’m looking at this thing and I’m saying, OK, this is just one Danish bank that’s laundered 232 billion. If we can lift the hood on Raiffeisen bank in Vienna, on Deutsche Bank, on UBS, Credit Suisse, I think that number, you could multiple the number by four easily and still be on the low end.

And so, I estimate that a trillion dollars of money has been stolen out of Russia by Putin and people around him and laundered it into the west, a trillion dollars, a thousand billion dollars.

RITHOLTZ: So, let’s talk a little bit about that. We’ve taken to calling London Londonistan because it’s blatant. You mentioned places like Miami and Saint-Tropez. How was this allowed? Why were Russians allowed to act with such impunity in the west?

BROWDER: Well, the reason that Russians have been allowed to act with such impunity is because so many — so many people are getting rich off of this. There’s so many bankers. I think that, like, Danske Bank, Estonian branch had a 400% return on equity. So, but so many people are getting so rich out of doing this that that — there and these are not just nobodies these are like highly placed influential people.

And in London, the Russians are — were sprinkling the money around like confetti, like every — all lawyers were getting this money and bankers and accounting firms and concierges and real estate agents and these were all people who had friends in high places. And as a result of this and this is, this had been a huge problem for the world, everybody was financially incentivized to look the other way when Putin was doing terrible things at every step of the way.

RITHOLTZ: Let’s get a little more explicit with some of that. In freezing order, you specifically name names and call certain people Putin’s us enablers you mention a couple of attorneys by name John Moscow and Mark Cymrot, former Wall Street Journal reporter Glenn Simpson, even Congressman Dana Rohrabacher, what — it has to be more than just money or am I making it too complicated? Is it just that simple, these folks are all for sale?

BROWDER: Well, let me tell you the story John Moscow because this is one of the most shocking stories.

RITHOLTZ: And such a great name.


RITHOLTZ: It’s wild.

BROWDER: Yes. Exactly. It’s straight out of central casting, this guy. So, I’m looking around as after Sergei’s murder, I’m looking around for somebody to help me find the money and I asked everybody I know who’s the best like anti-money laundering lawyer in the world?

And like four people tell me go to this guy, John Moscow, and I had to laugh. Like, what a John Moscow? So, I go to this guy, John Moscow. He’s a former New York DA who was responsible for prosecuting all these big money-laundering cases in New York and he’s the real deal. This guy is, like, you know he went into private practice after — after his life as a prosecutor and he knows his way around all the different tools of finding dirty money and he gave us a whole bunch of — we hired him, we made him a bunch of money and he gave us all sorts of like good ideas and helped us draft all these subpoenas and all these interesting stuff.

And then one day, he just like, poofs, disappears into the ether. Stops returning my calls and effectively just stops working for us. Anyways, I thought that was pretty weird but I’ve encountered so much horribleness in my life, that’s hardly the worst horribleness and we found him some other lawyers and took all of John Moscow’s ideas and implemented them and we found the money in New York and we found a bunch of money going to purchase luxury apartments in New York, $20 million worth of luxury apartments coming, and which was trade — which was linked to this fraud that Sergei Magnitsky was killed over.

So, I take this to the New York authorities and they passed it up to the federal authorities and the U.S. government, the Department of Justice, issues of federal forfeiture order over all these properties. And when you read the complainant, it’s just like, you know, just the most damning things you’ve ever seen.

And I couldn’t imagine that anyone would ever show up to try to defend it. I thought the Russians would just, like slither into the — slither away and just let their apartments get seized. But when — as soon as the government filed it, the next day, a lawyer appears on behalf of the Russian culprits and who’s the lawyer? John Moscow.

So, the lawyer who’s my lawyer, the guy — I’m a victim, well, Sergei is the victim, I’m the victim, we’re the victims, a lawyer for the victim switches side and becomes the lawyer for the alleged perpetrator.

So, I mean, I’m not a — I didn’t go to law school. I went to business school but I know that you can’t do that. Lawyers can’t switch sides. I mean, that’s absurd. And I should point out that — that he didn’t just do this by himself, he did this, you mentioned other lawyer named Mark Cymrot and it wasn’t like they were just like two lawyers working out of a shopping mall, they working for BakerHostetler. This is one of the most prestigious law firms in America.

They have, like, thousands of lawyers. They represent Microsoft, Ford Motor, all sorts of other prestigious companies and this firm basically went from working for the agents of the Russian government and switching sides. And the first thing he did when he switched sides is he then issued a subpoena against me looking — demanding all of my personal security details, all of my travel information, all the information about my colleagues and their families. I mean, it’s shockingly and what — and where is this information going to go? This is going to go to his Russian client who’s an agent of the Russian government.


BROWDER: To kill me.

RITHOLTZ: Unbelievable.

BROWDER: And BakerHostetler, let me just say that a couple more, BakerHostetler, major American law firm, is working, you know, effectively working as an arm of the Russian intelligence services in America and you say, why are they doing it? They’re doing it for money, plain and simple, for tens of millions of dollars.

RITHOLTZ: You filed a number of motions to have them disqualified. You had kind of an old doddering 80-something-year-old federal judge who really didn’t understand the case, how did you ultimately get them kicked off the case? I was fascinated by that in in freezing order that they had previously made some motions saying this has nothing to do with Browder, we didn’t represent him. This is a completely different entity and then they kind of the shot themselves in the foot. Tell us about that.

BROWDER: So, the first thing we did was when this happened, I said, well, this is not right. This is not legal. We just — so we filed the motion to have them disqualified because there it was a conflict of interest. And, I mean, it just seems like plain as day and if you were to survey a hundred legal professionals, a hundred of them would say this is a conflict of interest.

So, we show up and I think it’s a no-brainer that the quick — quick and simple procedure and we get rid of him and no longer be at risk of him knowing all of my personal details and being able to share them with the Russian government. And so, we file it and we — we got the most unlucky draw you could ever get history of draws in the court and we get the judge, his name is Judge Thomas Griesa.

And this Griesa, at the time, was 83 years old and — and he had, long ago, lost his — you know, he was just old age does terrible things to people and I know it from my own family and my own father when he got really old and my father was a genius mathematician, one of the top mathematicians in the world, and things weren’t so great when he got into his mid-80s.

And this guy, you know, there’s no mandatory retirement age for a federal judge and we got in front of this guy and he didn’t understand. He just didn’t understand that there was a conflict of interest. And he was — not only that, he was sort of angry with me for sort of delaying the case by making this motion and he granted the subpoena in full.

And basically ordered me to hand over all of my information to the, effectively, to the Russian government, which would have gotten me or people close to me killed. And we went through hundred and hundreds of thousands of dollars of legal defenses fighting this thing off. And finally, we sort of did a Hail Mary and we appealed it, there’s a it there’s a special type of legal challenge you could called the writ of mandamus which almost never succeed, where you’re basically saying that the judge has gone off the reservation.

And we filed — and like, which has never succeed. But we filed it and we went again — and we went to the Appeals court and the judges in the Appeals court said this is the most unbelievable thing they’ve ever seen. And they disqualified John Moscow and BakerHostetler. And interestingly, the judge was sort of quietly put out to pasture, and we got rid of them or so we thought.

And then we discovered after the whole case is over, when the — when the case finally came to fruition, that the Russians paid the U.S. government $6 million dollars instead of going to trial. And then we discovered afterwards that even after John Moscow and BakerHostetler were disqualified, they continue to secretly work for the Russians.

RITHOLTZ: Now, if you’re working for the Russians, a foreign entity, don’t you have to register as a lobbyist? Tell us a little bit about that.

BROWDER: Well, so what was interesting was they weren’t just doing this case, they were running all around Washington. BakerHostetler and they also hired a guy name Glenn Simpson who is the author of the Trump dossier. So, they hired Glenn Simpson to basically run a smear campaign against me and the Magnitsky Act in Washington as we were lobbying for the Global Magnitsky Act to be passed in summer of 2016.

And so, you’ve got this guy, Mark Cymrot, who is going around briefing members of Congress saying that Magnitsky was a crook, Bill Browder’s a crook, don’t do the Magnitsky Act, don’t name it after Magnitsky, don’t do it.

Glenn Simpson was trying to get journalist write these articles. He was feeding in misinformation and nonsense to different journalists and desperately trying to create this appearance that — that Putin was good and me and Sergei Magnitsky were bad and the Magnitsky Act was something wrong and terrible.

And when you do that — and so, they came up with this thing a long time ago during — during the second world war when the Nazis were doing similar types of stuff, they came up with the law called the Foreign Agent Registration Act in Washington. And Foreign Agent Registration Act says that if somebody is working for a foreign government or an entity connected to a foreign government, they have to declare, do a public declaration and with the Department of Justice to say that they’re working for — as a foreign agent for Russian or for foreign government.

And so, this is a clear example when Mark Cymrot from BakerHostetler and Glenn Simpson should have been doing that. And why — why is important? Because then you understand that this is the Russian government’s agenda and then all sorts of people would say, OK, well, actually I’m not so interested getting involved in this thing. But they — they didn’t do that.

And so, they violated the Foreign Agent Registration Act by just basically running roughshod over the whole thing. We made a complaint to the Department of Justice, and unfortunately, to this day there has not been a prosecution in this case.

RITHOLTZ: That’s shocking. That’s absolutely shocking. So, last question in this segment has to be given all this money that’s been laundered not just through Danske Bank but all these western banks that you are estimating conservatively at $1 trillion, what is Vladimir Putin’s net worth? Is he the wealthiest person?

BROWDER: No question. Vladimir Putin is the wealthiest person in the world by huge amount. I haven’t done the calculations recently, but like, you know, five or six years ago, I think he was worth more than $200 billion. That number has probably multiplied by now.

He’s an extremely rich man and his wealth, I believe is the source of all the problems that we’re facing today. The fact that he’s so rich, he’s stolen so much money from people who bought so many yachts and villas and all those kind of stuff, and that’s all money that should’ve spent on healthcare and education and all the stuff that people in Russia deserve. And it’s been stolen by him and his cronies.

And I believe and I think that if you were to pull anybody who really understands Russia, Alexei Navalny, the guy in jail, Mikhail Khodorkovsky, the guy I was telling you about who spent 10 years in jail, or any of these other Russian dissidents, Gary Kasparov, the former chess champion, and and every one of them will tell you that that the reason why Putin has started this war in Ukraine is he was worried about people in Russia rising up against them eventually because they were so angry at the corruption and all the money that’s been stolen and they needed to create a foreign enemy and that’s what this war is about.

It’s not about the Greater Russian Empire or NATO. It’s about Putin being a corrupt, a sick corrupt man who needed to create a major distraction so that the people in Russia didn’t rise up against him. And it’s succeeded. The war in Ukraine is — had led to an 83% of enthusiastic approval rating of Vladimir Putin.

RITHOLTZ: So, let’s talk a little bit about this invasion of Ukraine which you’ve described as really a wag the dog sort of situation. he — Putin is trying to distract the Russian populace from the state of their economy and all the corruption that’s taking place. Tell us your thoughts about what’s going on now.

BROWDER: So that Putin has to diverge the anger that Russian people have for — that you can’t get a doctor to prescribe medicine. Your children aren’t being educated, the potholes in the roads aren’t being filled, he has to distract from that anger because he knows that one day, it’s like tinder in a forest, like all dry leaves that all it takes is one match to set it on fire.

And he can putt 10 people in jail, he can put 100 people in jail, he can put 1,000 people in jail, but if a million people mark — march on red square, it’s finished. And he’s so scared of that and he’s created such a pressure cooker type of situation by stealing all those money over such a long period of time that he knows that that’s going to — that that kind of thing is going to come for him at some point.

And that’s why he started this war. And so, so it’s really important to understand this because as everybody is looking at this terrible war in Ukraine and all of the tragedy and all the implications in the west, everybody is desperate for this thing to end. And a lot of people, a lot of very learned people in Washington and other — Berlin and London are all looking at this thing and saying, well, if we give him this or we give him that, then maybe he’ll stop.

First of all, appeasement never works but beyond that, that shows that a fundamental misunderstanding which is that it’s not about NATO, it’s not about wanting some piece of Ukraine, it’s about wanting to be at war so that he can stay in power.

So, the endgame for him is being at war. And if that’s the case, there’s nothing we can offer him even if we — even if we wanted to be appeasers. And a lot of people are saying this war is going badly for him and it is going badly. We could see the military defeats and the number of dead Russian soldiers and all the terror and the fact that he succeeds getting to Kyiv and all those kind of stuff.

But the one thing that’s going really well for Putin is that he didn’t have to worry about being overthrown in Russia and that’s a very happy place for him to be, that he can sit there, confidently know that he’s securely in power. And, so as we’re all sitting here and thinking, that he must be really upset and the oligarchs are upset, well, no. He’s pretty happy right now because at least he knows he’s not going to be overthrown.

RITHOLTZ: Bill, just unbelievable, incredible stuff. You — you really are doing God’s work. It’s just — the story you tell in Red Notice is just astonishing. It reads like a spy thriller. I’m very pleased that you managed to get so much legislation passed in the United States and around the world and good luck with your campaign. We’re rooting for you. We really — it’s really just an amazing set of achievements that you’ve completed under the most trying possible conditions.

And all of the global recognition and human rights awards that you’ve garnered are well deserved and thank you for all the things you’re doing.

BROWDER: Thank you.

RITHOLTZ: If you enjoyed hearing this conversation, be sure and check out all of our previous 400 or so interviews. You can find those with you get your favorite podcast, iTunes, Spotify, Google, Acast, where ever.

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I would be remiss if I did not thank the crack team that helps put these conversations together each week. John Wasserman is my audio engineer. Atika Valbrun is my project manager. Paris Wald is my producer. Sean Russo is my researcher. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio




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