19 July 2017     home | subject timeline

Russian Corruption, US Sanctions and Putin

According to reporting by Fareed Zakaria, to understand better what is going on between Putin and the US, and to understand the meeting between Don Trump Jr and Russians back in 2016, we need to look at Putin's dislike for an act of the US Congress in 2012: the Magnitsky Act.

Sergei Magnitsky, a Russian lawyer and auditor, uncovered a big tax fraud involving Russian officials. He was sent to prison, torture and died in prison. An Organized Crime and Corruption investigation traced some of the missing funds involved in the fraud to a company owned by Denis Katsyv, the son of Pyotr Katsyv, the wealthy and powerful former minister of transportation in the Moscow region. The money trail went to a real estate firm that was buying luxury Wall Street apartments. The Magnitsky Act freezes the assets of those believed to have been involved in such corruption and bans them from entering the United States.

In 2016 the Russian lawyer, Natalia Veselnitskaya, wanted to talk to the Trump team about the Magnitsky Act, perhaps hoping that a Trump administration would do something about it. Donald Trump Jr agreed to the meeting. Trump Jr. Greg Myre at NPR writes:

Trump Jr. has also said that — to his disappointment — last year's meeting with the Russians focused on the Magnitsky Act. Trump Jr. was told in advance the meeting would produce critical material on Democratic presidential candidate Hillary Clinton. When the topic turned out to be the U.S. law, he considered it a waste of time.

Analysts have offered many theories on why Russia wanted to meddle in the U.S. presidential election: to undermine the credibility of the U.S. vote or to harm Hillary Clinton, whom Putin blamed for the protests leading up the Russian presidential election in 2012.

Rarely mentioned is the Magnitsky Act, a relatively obscure matter inside the U.S. but a major frustration for Russia's leadership.

On his show broadcast on July 16, Zakaria's guest Bill Browder (described by Fareed Zakaria as "once the largest foreign investor in Russia") told Zakaria:

Well, so what we figured out was that there are probably 10,000 people in Russia that commit very grave human rights abuses and crimes for money. And then they take that money and they keep it in American banks and British banks and Swiss banks. They send their kids to boarding schools. They send their girlfriends to Milan on shopping trips. And we figured that the one thing we could do in the West when they do these terrible crimes is not to let them come to the West, not let them keep their money in the West.

... Putin cares personally for two reasons. First, and most importantly, Putin received some of the money from the $230 million crime. We know that. We've tracked it because, in the Panama Papers — we've learned from the Panama Papers, which came out last year, that a man named Sergei Roldugin, who's a famous cellist, was — received $2 billion of largess from the Russian government. And what we learned then from those Panama Papers, the names of his companies, and we were able to trace some of the money from the Magnitsky crime, from the crime that Sergei Magnitsky uncovered, going to Sergei Roldugin.

... Putin understands that, at some point in time, he will be targeted by the Magnitsky sanctions. And as I've said on this show, Putin is the richest man in the world. I would estimate he's worth $200 billion. And much of that money is held by nominees offshore. And that money will eventually be frozen under the Magnitsky Act if he ever loses his power as president of Russia.

Browder describes getting rid of these sanctions as Putin's "largest foreign policy priority."


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Copyright © 2017 by Frank E. Smitha. All rights reserved.