Browder’s lawyer dies in Moscow jail

The Financial Times, by Catherine Belton in Moscow

A lawyer representing William Browder, the foreign investor who was barred from Russia, has died in a Moscow jail amid an escalating war between the activist investor and the Russian government over claims of tax fraud and corruption.

The death of Sergei Magnitsky, 37, on Monday night will reignite questions over Moscow’s campaign against Mr Browder’s Hermitage Capital Management, once Russia’s biggest foreign portfolio investor, just as it seeks to entice investors back into the country.

Mr Magnitsky and his lawyers had filed numerous complaints that he was being denied medical treatment for pancreatitis, which developed after he was detained late last year on charges of tax evasion as part of a probe against Hermitage. Hermitage said on Tuesday that Mr Magnitsky’s lawyers had been told that he died of a ruptured abdominal membrane just days after a court in Moscow ruled to extend his detention.

Mr Magnitsky’s colleagues accused the police on Tuesday of deliberately worsening the conditions he was being held in during his detention at the notorious Butyrka jail, to force him to testify against Hermitage.

“The police killed him,” said Jamison Firestone, managing partner at Firestone Duncan, the Moscow law firm where Mr Magnitsky worked. “I don’t know whether they intended to kill him or put too much pressure on him . . . but they wanted him to fabricate evidence to make their case stronger against Hermitage … These officers would tell him he could be released if he gave the right testimony.”
The interior ministry denied the claims, saying that the case against Mr Magnitsky was solid and that they had no interest in causing his death because they had hoped to convict him when he was brought to trial. It said Mr Magnitsky’s cause of death had yet to be determined, but that a preliminary investigation showed he had died from toxic shock and heart failure. It said the prison authorities had done all they could to help Mr Magnitsky and she denied that he had complained of health problems previously, despite written complaints seen by the Financial Times.

Mr Browder, an activist investor who crusaded against corruption in Russia’s blue chip companies, was barred from the country in 2005 on grounds of national security. After the Russian authorities launched a tax investigation into Hermitage, Mr Browder responded with his own probe, uncovering what looked to be a huge tax fraud that he says began when interior ministry officials raided his fund.

Mr Magnitsky was arrested shortly after he testified, naming officers of the interior ministry involved in the seizure of the companies, Hermitage said. Mr Magnitsky was “brave enough to stand up and point out corruption going on in the police force. He shouldn’t die in vain,” Mr Browder told the Financial Times on Tuesday.

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