An Essay Book Review of "Freezing Order: A True Story of Money Laundering, Murder, and Surviving Vladimir Putin's Wrath," by Bill Browder
The perils of following the new dimensions of dirty money and
Corruption in Putin's Russia
Bill Browder descended upon Russia during its "cowboy capitalist days." Right after Yeltsin had handpicked and handed over power to a diminutive youthful-looking nondescript KGB officer named Vladimir Putin.
By 2009, Browder owned the largest Western-run hedge fund in Russia. Which, at its height was responsible for some $4.5 billion worth of investments. But despite Browder having attained his success legally, the Russian people, their businesses and government were being systematically robbed blind by a greedy kleptocratic criminally-led oligarchy.
As Browder expanded his entrepreneurial footprint deeper into Russia's erratically-evolving western style business practices, he had a visceral reaction to the mindless corruption going on all around him.
Virtually all successful Russian companies, including those Browder's Hedge Fund represented, were victims of the systematic looting by this handful of greedy oligarchs. And while his Russian friends took this in stride as the price of doing business in Russia, Browder could no longer stomach it.
Out of a sense of reflexive disgust he decided to show them how to fight back. As a result, not only did he become an accidental activist but one soon to have a big target on his back.
His plan was to name and shame; cajole and expose; and then freeze and seize the oligarch's ill-gotten gains. To execute this plan, he only needed to make a few mid-course corrections to his existing hedge fund information gathering processes. Instead of focusing solely on the customary hedge fund balance sheets, Browder redirected his research team to focus on where money was being stolen. How the thieves were stealing it. And who was pocketing the proceeds.
With the information from this new approach, Browder would file law suits, launch proxy fights, and brief governments outside of Russia about the damage these practices were causing their countries specifically, and the global economy, more generally.
This aggressive game plan obviously was not designed to win friends and influence the most likely thieves, the Russian oligarchy. Instead it was designed to make them squirm.
Despite the risks, Browder forged ahead. Fashioning his findings into an enviable laptop Power Point anti-corruption "dog-and-pony show." One with diagrams and flowcharts and pictures of the money launderers as well as all bank transaction details at every station along their circuitous money laundering routes.
Following the money became infinitely easier when his team discovered that whenever laundered money is converted into dollars anywhere along its transmission route, it then comes under the jurisdiction of a US clearing bank and US courts, leaving a permanent record in New York City. And this meant that any such records could be subpoenaed by US courts even it they involved transactions between two banks in Russia. If money laundering was proven to be involved in such transactions, then the funds could be frozen and seized.
With this new information taken into account, the plan was put on the road globally. And for a time it revealed the anatomy of money laundering coming out of Russia.
Quite simply, it was nothing more than transferring money that left an indelible trail through a handful of transmit countries like Moldova, Cyprus, Lithuania, Latvia, and Estonia, before landing in England, France, Switzerland or the USA. Where it was then accumulated in banks or stored in real estate, or used to make extravagant purchases like yachts, private planes, jewelry or fine art.
The mere pressure of knowing that the money trail had been revealed was enough to raise the price of the Russian equities Browder held, making him and his clients handsome amounts of money the old fashioned way, legally.
But the "dog-and-pony show" literally had a fatal downside. It had not just begun raising awareness around the world about how the Putin-led oligarchy was robbing the Russian people blind and infecting the global economy. But also, by exposing the cold-blooded facts and the unbelievable extent of Russian corruption, Browder was landing a sharp sucker-punch into Vladimir Putin's gut. This was sure to have certain, negative, and prompt consequences.
Bill Browder had embarked on a dangerous course, knowing full well he would be stepping on sensitively-laid tripwires leading to booby traps set and policed by none other than the little oligarch-in-Chief himself. He knew that lives were at risk because dead bodies had begun dropping everywhere.
But once he crossed that line, there was no turning back.
Putin moved aggressively and decisively to take the initiative away from Browder and quell the threat from team-Browder's road show. As he assembled his own ragtag team of criminals, FSB thugs and apparatchik sycophants, he expelled Browder from Russia, labeling him a national security threat.
He then ordered his Ministry of the Interior to allow a bunch of criminals take over Browder's businesses, completing a strategic flip of the script from Browder being the hunter to now being the target fiercely hunted by Putin's goons. The fight had been fully joined.
Browder tucked his tail. Sold most of his Heritage Funds holdings. Paid a final steep exit tax bill of $230 million. And flew back to London with his team.
But the fight was not over. Far from it. Team-Browder fled only to live to fight another day. But this time it would be at a stand-off distance from the little wannabe Czar.
In the deadly cat-and-mouse game that ensued for the better part of the next decade, Putin's thugs more than proved their mettle. They pulled out all of the stops: They hounded Browder from the UK, to Finland, to Switzerland, to Spain, even showed up in an infamous meeting with Donald Trump's transition team in Trump tower in the USA. Putin's counter-plan to defeat team-Browder's plan, has been described as the most sophisticated influence operation in the modern history of espionage.
Meanwhile back in Russia. One of Browder's smartest teammates, his lawyer, Sergei Magnitsky, chose to stay put behind enemy lines on his own home turf, electing to continue the fight in the trenches on the frontline in Moscow rather than at a stand-off distance in London.
Sergei knew the ways of the Russian streets, the weaknesses of Russia's pre-computer age record keeping, and it's idiosyncratic bureaucratic traditions, as well as the best and cheapest ways to find, buy, and follow information trails to hunt-down the millions of rubles Russian oligarchs had stolen and were still stealing.
In fact it was Sergei's inside knowledge that allowed him to purchase on the cheap from kiosks on the back streets of Moscow, reams of data files on all manner of Russian business, banking and government records. Among many other revelations, these hard copies offered up two startling discoveries that would be responsible for Sergei landing in a Russian prison where he was eventually tortured and beaten to death.
The discovery Sergei made, that led to his imprisonment and death was what had happened to the $230 million Browder paid to the Russian treasury to satisfy his tax bill allowing him to exit Russia.
Incredulously, this tax payment resurfaced later in Russian governmental records as a tax refund paid to a mysterious unknown person who conveniently died before he could be hauled into court. The amount paid out as a tax refund, the $230 million, just happened to be the largest tax refund ever paid out in Russian history!
The shell company requesting the refund just happened to also be the new owners of Bill Browder's stolen company. But they turned out to only be cutouts to get the money into the right bank. One owned by a criminal friend of Putin.
Sergei not only traced this mysterious transaction's history to a bank owned by a criminal oligarch close to Putin, but more importantly, he traced another similar tax refund of $170 million that traveled the exact same money laundering route: from the Russian treasury to the same Putin-friendly banker as the previous record making tax refund.
In both cases, the receivers of the funds were conveniently found dead. After which the funds then mysteriously vanished into thin air as did the shell companies that had requested the refunds.
This discovery was a watershed.
Sergei had discovered and documented a whole new dimension of criminal money laundering. And quite simply, for Putin, this discovery was a bridge too far: Sergei was getting too close to Putin's stolen hidden wealth. And thus, had to be silenced.
And even though Sergei paid with his life, the cat was now out of the bag. The scab covering the boil of Russian corruption had finally been lanced, and its pus in the form of a stream of blood from homicides had begun spilling through the streets of Moscow.
From Sergei's death onwards, anyone who got close to Putin's money trail got burned, imprisoned, fell off ten-story buildings, or was imprisoned and brutally and openly tortured and murdered as happened to Sergei. For Putin, the gloves now came off. This was no longer cat-and-mouse: This was existential.
However, this state-sanctioned mob-like mayhem did not stop Bill Browder and his team from digging even deeper, improving their methods and research, and then updating their road show on the fly as they kept tugging at the thread that Sergei had unraveled.
This thread. That Sergei had exposed. Led to a whole new dimension of criminality. Criminality that invariably vectored directly back to Putin's elaborate but well-hidden money laundering schemes. Schemes that ultimately had been responsible for trafficking more than one trillion dollars in money stolen from the Russian government in the 24 years that Putin had been associated with power in Russia.
How did the world come to validate Sergei's discovery of Putin's vast hidden money trail?
God himself must have been smiling along side Sergei in heaven when he sent down the Panama Papers as a parallel independent fact-checked confirmation of Putin's millions being routed through his lifetime friend and renowned violinist, Sergei Roldugin. There simply was no innocent explanation for the hundreds of billions laying untouched in a concert violinist's Russian bank account.
What musician, no matter how renown, makes that kind of money?
The reader is left to surmise that maybe it just might have had something to do with the solitary fact that this virtuoso violinist was a lifelong friend of the little KGB agent, turned filthy rich wannabe Russian Czar.
As part of their legacy to Sergei, these discoveries also led not just to the US Magnitsky Act, but also to a much broader global counterpart. Both of which placed sanctions, travel restrictions and issued arrest warrants to human rights violators and money launderers.
It is difficult to contest the conclusions drawn in the coda to this gripping book: that in order to get the Magnitsky Act repealed, Vladimir Putin intervened in the US 2016 presidential election. That way he could ensure that the person he had groomed since 1987, would win the US presidency rather than his ideological arch-enemy, Hillary Clinton.
Putin indeed got his wish. He had his cake: As we were forced to watch the embarrassing spectacle of a US president groveling and genuflecting obsequiously on the global stage like a trained circus seal, croaking to build a Trump Tower in Moscow. Obediently bowing down to the sound of the whip cracked by his ringmaster Vladimir Putin.
Too, it seems clear now, just as the author claims, that when a slew of Russians descended upon and surrounded our "45th President to be." Filming news directly back to Moscow while toasting with champagne from the Oval Office, Putin's only concern was how best to engage in a full-court press to get the Magnitsky Act repealed.
Don Junior was told to say as much in the June 2015 meeting in Trump Tower. Papa seal instructed him to croak that the meeting "was about adoptions:" code word for the Magnitsky Act. We now know what was offered. It was not a new Trump Tower in Moscow as Papa seal so desperately wanted. But dirt on Hillary Clinton. Don Junior immortalized this traitorous quid pro quo with "If it's what you say, I love it!"
Trump played America and Putin played him. So what does that say about 74 million Americans who want to place him in office again?
But Putin would not get to eat his cake too: Because in one of its few instances of heroic patriotic bravery, our lowly-rated Congress, not only took the issue of repealing the Magnitsky Act completely out of Trump's hands, but then slammed that door shut in Putin's face. Making it impossible to repeal the Magnitsky Act without a two-thirds Congressional majority.
What a thrilling read. Five stars
