Sergei Magnitsky

Denis MacShane Excerpts

Wednesday 11th January 2012 Westminster Hall

[Mr Denis MacShane (Rotherham) (Lab)]

It is a great pleasure to initiate this debate under your chairmanship, Dr McCrea. Today I want to deal with the tragedy of a lawyer who worked closely with and for a British company—and its British chairman who is present in Westminster Hall—and who was done to death under the most atrocious circumstances. If a British lawyer working for an overseas firm had been arrested and so mistreated in the UK, all hell would break loose. This tragedy, however, happened in today’s Russia, and my charge is that the British Government have been singularly lax in dealing with the case, and lacking in adequate and necessary measures, not only to obtain justice but to send a clear message that putting to death a lawyer who represents British interests is not cost free. I do not claim a new policy of “advocatus Britannicus sum”, but the idea of civilisation and the rule of law, as well as the clear rules in the European convention on human rights to which Russia is a signatory, provide a special place for lawyers to represent their clients without facing prosecution or persecution unto death.

The details of the tragic death of Sergei Magnitsky are somewhat well known. Mr Magnitsky was the Moscow lawyer of British businessman William Browder. Mr Browder was born American and is the grandson of Earl Browder who was leader of the Communist party in the United States during the 1930s until he fell out with Stalin in 1945. Earl Browder’s grandson decided that capitalism was a better bet than communism, and over a decade beginning in the 1990s he built up the largest investment fund in Russia with billions of dollars of assets. However, not all went well for young Browder when he started publicly complaining about endemic corruption in Russian state companies, and in 2006, President Putin expelled him from Russia as a “threat to national security”. I would like to recommend to the House the remarkable documentary by Ms Norma Percy on the early Putin years. It will be shown on BBC 2 next Thursday and it illustrates the interface between politics, state bureaucracy and business.

Once the Putin regime decides that it does not like a business leader, it does not operate in half measures, and when it decides to turn on someone, it does so in spectacular fashion. After Browder’s expulsion, Putin’s tax police raided his offices in Moscow, seized all his company stamps and seals and stole his investment holding companies. Browder hired a bright young Russian lawyer, Sergei Magnitsky, to try to stop this continuing state-sanctioned crime. Magnitsky investigated all the police actions and discovered that Browder’s companies had not only been stolen but had subsequently been used by the tax police to fraudulently refund from Government coffers the $230 million in taxes that Browder’s firm had paid in the previous year.

Magnitsky did what any lawyer would do on behalf of his client: he filed criminal complaints and testified on the involvement of the tax police in that enormous theft. That was a big mistake. He was subsequently arrested by the same tax police officers against whom he had testified, and blamed for the fraud himself. The scams that the Putinocracy arranges are not just for a few high-up people—everyone gets a cut. To shut him up, Magnitsky was flung into one of the roughest prisons in Russia and essentially held a hostage. Because the Russian state could not get at Mr Browder, who, as a British citizen was now safe in London with his family, they went for his lawyer to send a signal to other firms operating in Russia saying that when the tax police—or anyone else demanding a cut—knock at the door, co-operation is wiser than insisting on the rule of law.

Sergei Magnitsky was brutally treated in prison. He was tortured for 358 days by sleep deprivation, freezing temperatures, the withholding of food and other torments left over from the Stalin era of torturing people whom the Kremlin did not like. After six months of such treatment he became extremely sick and was systematically denied any medical treatment. Eventually, Magnitsky’s beleaguered body began to give way and his condition became critical. Instead of sending him to the emergency room, his jailers put him in an isolation cell and allowed eight riot guards with rubber batons to beat him until he was dead. In November 2009, he was found lying in a pool of his own urine, dead on the cell floor at the age of 37.

Since then, the Russian Government have tried to cover up the cause of Magnitsky’s death, and a network of named officials in the tax, police, public prosecution and prison departments of the Russian state has been identified as part of that cover-up. Many of those involved have bought property abroad at prices that would be impossible on their declared salaries.

None of those facts are secret and they have been reported by journalists in Moscow, as have the details and names of those involved. The names have been listed by US Senators, Congressmen and Congresswomen, and by parliamentarians in some EU member states and in the European Parliament. The Magnitsky affair has also been the subject of a Council of Europe report. I, together with a number of right hon. and hon. Members, as well as Peers, have asked questions in Parliament and sought to highlight this assault on a respected British business, and show the terrible insight that the Magnitsky death gives us into how Russia operates. I had the luck to secure this debate, but that could have happened to any number of interested colleagues who support me on this affair, some of whom are present in the Chamber.

Vasily Aleksanyan was another young lawyer, and former general counsel to Yukos. In 2006, Mr Aleksanyan was arrested as part of the persecution of those involved in Yukos. He rapidly developed serious health conditions due to AIDS-related illnesses, but was denied antiretroviral treatment or chemotherapy in prison. In 2008, the European Court of Human Rights intervened and ordered Russian authorities to release Aleksanyan. The damage done to his body during his detention was too great, however, and he died last year as a direct result of the denial of treatment in jail.

That is the Magnitsky story. We must now turn to the Whitehall story and ask the Minister why the Foreign Office and Home Office have been so lax in taking up the Magnitsky case, and unwilling to take action against the named officials who were involved in theft via the tax system and the crime that Magnitsky sought to reveal. Will the Minister explain why some of the principals involved have been allowed to enter the UK without let or hindrance? Lieutenant Colonel Artem Kuznetsov from the Russian Interior Ministry was named in Magnitsky’s testimony as having orchestrated the theft of the Hermitage fund’s investment companies. Kuznetsov was also accused of perpetrating the $230 million tax fraud, as well as Magnitsky’s false arrest and persecution in detention. Public records—let me stress that—show that shortly after the $230 million was paid from the Russian Treasury, Kuznetsov’s family acquired $3 million worth of high-end apartments in Moscow, land plots outside the city and several luxury cars. Kuznetsov travelled to the UK twice in 2006.

Major Pavel Karpov, also from the Russian Interior Ministry, was named by Magnitsky as a close accomplice of Kuznetsov. Karpov initiated the criminal case against Mr Magnitsky that was used as a pretext for his false arrest. Public records in Russia—again, I stress that—show that Karpov’s family acquired $1.3 million in real estate assets and luxury cars following the completion of the fraud. Mr Karpov travelled to the UK four times between 2006 and 2007.

Dmitry Klyuev is the owner of Universal Savings bank through which the $230 million proceeds of the fraud were laundered. He was previously involved in a number of other tax-refund frauds, and in 2006 was convicted of a $1.6 billion fraud relating to the attempted theft of shares from Mikhailovsky GOK, a Russian iron ore company. Mr Klyuev also travelled to the United Kingdom at least five times in 2008. As I have said, all these names are on the record in Russia and on Capitol hill in Washington.

The following Government officials also played a role in the tax fraud that Magnitsky uncovered, his subsequent arrest and imprisonment, the persecution of Hermitage lawyers and executives, Magnitsky’s continued detention, the denial of medical care, torture, the denial of fair hearings, and finally his death in custody and the subsequent cover up: from the courts service, Judge Yelena Stashina, Judge Alexei Krivoruchko, Olga Egorova; from the Interior Ministry, Mr Oleg Silchenko, Oleg Urzhumtsev, Alexei Anichin, Oleg Logunov, Boris Kibis, General Major Tatiana Gerasimova; from the FSB—the Russian secret service and the successor to the KGB—Mr Viktor Voronin; from the tax offices, Olga Stepanova and Elena Khimina; from the prison services, Dmitri Komnov, Fikhet Tagiev and Yuri Kalinin; and from the General Prosecutor’s Office, Andrey Pechegin.

I ask the Minister to agree that those people should now be banned from entering the UK and their names circulated via Interpol and Europol. We need to sharpen up our diplomatic tools by declaring that the functionaries linked to Magnitsky’s death are unwelcome as visitors in Britain, thus copying what the US State Department has done under pressure from the US Congress.

[Mr Dominic Raab (Esher and Walton) (Con)]

rose—

[Chris Bryant (Rhondda) (Lab)]

rose—

[Mr MacShane]

I give way first to my hon. Friend.

[Chris Bryant]

The hon. Gentleman and I are probably about to say exactly the same thing. Does my right hon. Friend agree that there is not much point in just banning these people secretly behind closed doors? It is important that we say publicly that they are not welcome in this country.

--- Later in debate ---

[Mr MacShane]

I think that I may just have hinted at that.

[Mr Raab]

I congratulate the right hon. Gentleman on securing the debate. Does he agree that in addition to highlighting the tragic case before us, it is time for a British equivalent of the US Sergei Magnitsky Rule of Law Accountability Act, which would hold to account more generically foreign officials responsible for grotesque human rights abuses, through travel bans and asset freezes, and also that, as in the US, this a matter not just for the Executive, but for Members of this House and for Parliament?

[Mr MacShane]

I would support that. Perhaps some right hon. and hon. Members present might combine to ask the Backbench Business Committee for a longer debate, which might allow a slight pause for breath and more development of some of these themes. In particular, it would show the Russian authorities that this is a cross-party affair, with support from a considerable number of Members of both Houses.

[Mr Robert Buckland (South Swindon) (Con)]

I just want to add Canada to the list. It has also passed legislation in similar terms to the United States, so it is not just one country but many countries taking a strong stand against these appalling acts.

[Mr MacShane]

Poland and, I believe, the Netherlands have done so as well, but the addition of Canada, which is a great beacon of democracy and a Commonwealth country, is most welcome.

Yes, I believe that we should be doing what has been set out. We should not need to have a debate, because I hope that when the Minister replies, he will tell us that he fully accepts that the Foreign and Commonwealth Office will put a statement, a note, in the Library tomorrow, with those names on it, saying that they are not welcome in the UK, and will pass the names on to Europol and Interpol. So far, the FCO has resisted that idea and has constantly sought to downplay the Magnitsky affair. The FCO position or, more accurately, the Whitehall position has been to shelter behind Russian bureaucracy.

On 15 November 2011, the Minister for Immigration finally replied to a letter that I sent him in August on the idea of a visa ban. That was a very discourteous gap between my letter and his reply. He wrote:

“The Russian Presidential Council on Human Rights presented to President Medvedev its report on Mr Magnitsky’s arrest and treatment”

and the

“Minister of the Interior has announced that its own internal investigation has not found any evidence of abuses by their officials”.

Well, that is a surprise—a bureaucracy defends its own people. Nevertheless,

“the Investigative Committee of the Russian Federation chaired by Alexander Bastrykin”

would report by 24 November. To my knowledge, no such report was issued, and it is time for the FCO and Home Office to stop parroting Russian excuses for inaction and instead to follow the example of the United States, Canada and Poland and make it clear that those who stole the money that Magnitsky was investigating and then colluded in his death should not be given a permanent status of impunity by Whitehall fiat.

In an earlier reply to a parliamentary question from me on 13 July 2011, the Minister for Immigration—I welcome the Under-Secretary from the Foreign and Commonwealth Office, but this is as much a matter for the Home Office as it is for the FCO—confirmed the following:

“The Secretary of State for the Home Department…does have the power to exclude foreign nationals whose presence in the UK she judges would not be conducive to the public good”,

but he added that

“the duty of confidentiality means that the Government are unable to discuss the details of individual immigration cases.”—[Official Report, 13 July 2011; Vol. 531, c. 398W.]

I am sorry, but that will not do and it is not true. Her Majesty’s Government have regularly published the names of those to whom they deny visa entry. They include or included the TV cook Martha Stewart, the actor George Raft, the Scientologist L. Ron Hubbard and even a Nobel laureate, the Chilean poet Pablo Neruda, who wrote:

“Death is the stone into which our oblivion hardens.”

It is the wish of the Russian authorities that Magnitsky’s death hardens into oblivion, but as another great writer who lived under communism, Milan Kundera, wrote:

“The struggle of man against power is the struggle of memory against forgetting.”

Let us not hear from the Minister today that the Government cannot publish the names of the people whom they ban. We should not allow Magnitsky to be forgotten. If the Home Office can publicly ban a cook, an actor, a loopy and a poet, surely it can ban those Russian officials named as associates in this massive theft, then the arrest and ill- treatment to the point of death of a lawyer representing a British citizen and his company.

Modern Russian apparatchiks like to visit, buy flats in and educate their children in London. If we name and shame and announce that they will lose those privileges if they break the law and allow a lawyer representing a British firm to die in agony for having defended his client’s interest, diplomatic pressure will be focused and sharp and will send a clear state-to-state signal that Russia cannot live above the law.

This is not just about Russia, however. We need to find ways of sending signals to mid-level officials in other authoritarian regimes that when they break the law, the doors of Britain are not easily open to them. A new approach is required to create a new tool of democratic diplomacy—namely, the precisely targeted travel ban that is made public so that all law-abiding state officials in Russia and elsewhere can see that corruption and collusion in murder are no longer crimes without sanction. That is what more and more decent Russian citizens want.

A further signal could be sent. Just as Mr Putin is not welcome on the streets of Moscow today, Britain should say that he is not welcome at the opening ceremonies of the London Olympics. In 1980, Mrs Thatcher had the guts to say no to a formal British endorsement of the Moscow Olympics after the Soviet invasion of Afghanistan. If the Prime Minister wants to emulate the Iron Lady, he should say no to Mr Putin, who will use the London Olympics and the winter Olympics in two years’ time as events for self-promotion.

Of the 20 years since the end of communism, Russia spent the first decade being plundered by oligarchs and the second decade being robbed by state functionaries up to the highest level. It is time that Russia became a normal rule-of-law nation and its tax collectors levied taxes for the good of the people, not their own offshore bank accounts.