Person of Interest: Bill Browder
Lake, Eli, Newsweek
Byline: Eli Lake
The man who provoked Russia's American-adoption ban.
Last month, when Vladimir Putin signed a law banning American citizens from adopting Russian children, it was widely seen as the latest indication that U.S.-Russian relations were spiraling downward. So who caused this turn of events? The obvious political figures certainly played their roles. But perhaps no one was more central to the unfolding drama than a businessman turned unlikely human-rights crusader named Bill Browder.
Browder's grandfather, Earl Browder, had been general secretary of the American Communist Party, but his grandson spent most of his career in a very different pursuit: making money. Bill graduated from Stanford Business School the same year the Berlin Wall fell. "My grandfather was the biggest communist in America," Browder recalls thinking at the time. "Now that the Berlin Wall has come down, I am going to be the biggest capitalist in Eastern Europe."
In 1996 Browder moved to Moscow and founded the Hermitage Fund, investing fortunes from America in newly privatized Russian companies like Gazprom. (Two years later he renounced his American citizenship and became a citizen of Britain.) At its peak, Hermitage was worth $4.5 billion. But Browder earned a reputation in this period as a "shareholder activist," launching his own investigations into the shady dealings of Gazprom and other Russian companies--and angering the Kremlin in the process. He was expelled from Russia in 2005 and declared a threat to national security.
Browder continued to tangle with the Russian government from afar. The Interior Ministry seized Hermitage's companies in 2007, but one of Browder's Moscow-based lawyers, Sergei Magnitsky, subsequently made an intriguing discovery: he uncovered what appeared to be a scheme by Interior Ministry officials to pocket $230 million in taxes paid by Hermitage.
Magnitsky testified against the officials in 2008 and was arrested by the Interior Ministry soon thereafter. The next year of his life was hell. At times he was thrown into jail cells with no heat, or placed in cells with more inmates than beds. At one point he was in a cell with no toilet and only a hole in the ground, where the sewage would often bubble to the floor. All the while, he was refused medical treatment for pancreatitis and gallstones. He lost 40 pounds in a year.
While Magnitsky's condition worsened in 2009, the newly elected Obama administration was seeking to improve relations with Moscow. …