www.nytimes.com/2008/07/24/world/europe/24kremlin.html
CLIFFORD J LEVY Published: July 24, 2008 MOSCOW -- William F Browder was one of the most prominent foreign investors here, a corporate provocateur who brought the tactics of Wall Street shareholder activists to the free-for-all of post-Soviet capitalism.
Enlarge This Image James Hill William F Browder in Red Square in 2005. Kremlin Rules Articles in this series are examining the crackdown in Russia under Vladimir V Putin.
World Economic Forum in Davos last year, he saw his chance. In a brief conversation at a dinner at the Swiss resort, he pressed Mr Medvedev for help in regaining his Russian visa.
A short time later, Mr Browder's office received a phone call from a senior Moscow police official, who said he had learned of Mr Browder's new visa application and might be able to help. "My answer will depend on how you behave, what you provide, and so on," the official said, according to a recording of the call supplied by Mr Browder. "The sooner we meet and you provide what is necessary, the sooner your problems will disappear." The phone call was one move in a wide-ranging offensive by Russian law enforcement that exposed Mr Browder to the kind of crippling investigations that Kremlin critics have regularly endured under Mr Putin. It appeared that the ultimate goal was not only to seize Mr Browder's investment empire, but also to make him an example of what happens to those who do not toe the government's line. His downfall offers a study in how the Kremlin wields power in the Putin era. The rule of law is subject to its wishes, and those out of favor are easy prey.
Russia, and the Kremlin's unwillingness to adopt serious measures to combat it by bolstering the independence of the police and the courts. The Kremlin may be reluctant to do so because it wants Russia's wealth to accrue to those loyal to the leadership. Until his visa was canceled and he moved his operations to London, Mr Browder cut a colorful figure in Russia, a foreign version of the Russian oligarchs who earned their fortunes in the mass privatization after the fall of the Soviet Union. He courted publicity, and his background made a good story: he is the grandson of Earl Browder, a leader of the American Communist Party in the 1930s. He often said that, not unlike Russia itself, he rebelled by becoming a capitalist. He arrived in Russia in 1996 after a stint in London as an investment banker, and quickly saw opportunities. Russia's economy was undergoing colossal changes, and Mr Browder positioned his company, Hermitage Capital, as a vehicle for Western investors to get a piece of the action. After Mr Putin became president in 2000, Mr Browder became a vocal supporter of the Kremlin, saying that Russia needed an authoritarian leader to establish order and calling Mr Putin his "biggest ally" in Hermitage's effort to reform big business. Mr Browder thrived, and the funds managed by Hermitage grew to more than $4 billion. Mr Browder does not know exactly why the Kremlin turned against him. But the Kremlin was consolidating control over prized companies like Gazprom and appeared to be chafing at criticism from outside shareholders. The police confiscated vital documents from his lawyer's office in Moscow. He discovered that his holding companies had been stolen from him and re-registered in the name of a convicted murderer in a provincial city. Whoever was behind the scheme took over much of Mr Browder's corporate structure in Russia, but failed to get at his investors' money. Even so, in recent weeks, Mr Browder said he had learned that his former holding companies had been used to embezzle $230 million from the Russian treasury. This article is based on interviews with Mr Browder, his associates and lawyers, as well as on numerous documents they provided that they say prove corruption. Requests for comment were made to several law enforcement agencies in Russia that Mr Browder accuses of carrying out, or refusing to investigate, the scheme.
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