On Nov. 23, DER SPIEGEL reported on the background of the so-called Magnitsky sanctions (the English report was published on Nov. 26). The sanctions, applied by the U.S. and others to Russian officials, are largely based on depictions provided by the former investor Bill Browder and are related to the fate of his employee Sergei Magnitsky.
Magnitsky died in 2009 in a Moscow prison under circumstances that haven't been completely clarified. Browder claims that Magnitsky was murdered because he had uncovered a tax scandal. The report from DER SPIEGEL describes the inconsistencies in Browder's version of events and demonstrates that he is unable to present sufficient proof for his claims.
Browder has now gone public with his complaints about the DER SPIEGEL story in the form of a letter to the newsmagazine's editor-in-chief in addition to a complaint filed with the German Press Council. In his letter, he accuses DER SPIEGEL of having misrepresented the facts.
We believe his complaint has no basis and would like to review why we have considerable doubts about Browder's story and why we felt it necessary to present those doubts publicly. The English text of the original story can be found here, and the paywall has been removed from the German version, which can be read here. In addition, you will find links below to some of the sources that we relied on in our reporting.
The English version of the original story did contain one error that has now been corrected. Due to a translation error, the English story said that the use of a rubber baton was recorded in a 2009 report. In fact, this information was only mentioned in a separate report from 2011. The German version did not contain this error.
There is no doubt that Magnitsky suffered a terrible death. As was mentioned in the original DER SPIEGEL story, he was "the victim of a terrible injustice." We also believe it is fitting to speak of "merciless negligence," due to the withholding of urgently necessary medical treatment. The "use of a rubber baton" is likewise beyond dispute. Nowhere in the story does DER SPIEGEL seek to exonerate the Russian state for Magnitsky's death. Rather, the story seeks to bring to light the inconsistencies, contradictions and unproven claims in the story that Browder has been telling Western governments for years -- a story that became the basis for Western sanctions against Russian officials.
Browder's account of the events surrounding Sergei Magnitsky's death is made up of several key elements.
How it all began: In Moscow in 2007, according to Browder, a tax investigation was launched with a "criminal and political" motivation. He claims it was fabricated and launched solely for the purpose of seizing important documents from some of his letterbox companies. On June 4, 2007, searches took place in Moscow and numerous company files were confiscated.
Magnitsky becomes a whistleblower: Browder claims he turned to Magnitsky to look into the raids, which had resulted in the seizure of three of his letterbox companies. According to Browder, Magnitsky testified before the State Investigative Committee on June 5 and Oct. 7, 2008, about his findings, explicitly accusing two policemen of wrongdoing: Artyom Kuznetsov and Pavel Karpov. Because of this testimony, Browder says, there was a clear motive for the later arrest and murder of Magnitsky.
Arrest and death: In fall 2008, a case against Magnitsky was opened for accusations of tax evasion. In November 2008, Magnitsky was arrested. On Nov. 16, 2009, he died in Russian custody. Browder has continually described Magnitsky's death as being the result of a targeted conspiracy to commit murder.
Browder's account of the precise sequence of events has varied. Of particular note are the videos that he has published on YouTube.
Among the claims made in the videos are the following:
"After Sergei Magnitsky testified against the same criminal group for an even larger crime, the same officers arrested, tortured and eventually killed Sergei to hide their crime."
"Instead of supporting Sergei Magnitsky and recognizing him as a hero, the government allowed interior ministry officers, Kuznetsov, Karpov ... to arrest, torture and kill him."
Each stage of this account includes numerous elements that do not hold up to scrutiny. A London court came to the conclusion that Browder failed to even come close to providing factual basis for his accusations against Karpov. (The full court decision can be read here.)
It repeatedly becomes clear that Browder's narrative contains mistakes and inconsistencies that distort the overall view of the events leading to Magnitsky's death.
1. The Tax Investigation
The investigations began much earlier than claimed by Browder. Though he has claimed on several occasions to first having heard the name of the investigator Artyom Kuznetsov in 2007, the inaccuracy of that claim is well documented. Kuznetsov's name was already included in letters relating to the tax investigation that were sent to Browder's companies in June 2006.
Read 2006 letter from Russian tax investigators here:
The fact that Browder's team was aware of the investigation is also evident from testimony given by Magnitsky on June 5, 2008. In that testimony, he said that Kuznetsov had requested company and bank documents in late May 2006. These mid-2006 inquiries were also mentioned in complaints sent by Browder's people to Russian authorities in December 2007.
Read the English translation of Magnitsky's June 5, 2008 testimony here:
On top of that is the fact that Magnitsky himself had been questioned by Russian authorities as part of a tax investigation in 2006. Inquiries into possible tax evasion were likewise made prior to 2004 with letterbox companies linked to Browder, including the company Saturn Investment, which Magnitsky had a hand in, according to his own testimony.
Read the English translation of Magnitsky's October 2006 testimony here:
Several court rulings were issued against Browder's companies as part of those inquiries, then the case was closed -- only to be restarted in 2008.
DER SPIEGEL does not uncritically adopt rulings made by the Russian judiciary. A conclusive clarification as to whether the accusations of tax evasion were valid would have to be performed by an independent court in a fair trial. But it is clear that the investigations didn't suddenly start in 2007 as Browder claims, allegedly with no basis. The investigations have a well-documented backstory. In its ruling in the case, the European Court of Human Rights therefore came to the conclusion that Magnitsky's "arrest was not arbitrary."
"The Court observes that the inquiry into alleged tax evasion, resulting in the criminal proceedings against Mr Magnitskiy, started in 2004, long before he complained that prosecuting officials had been involved in fraudulent acts." ( Read the full judgment here .)
2. Magnitsky's Role as a Key Provider of Evidence
In Browder's version of events, the testimony Magnitsky provided to investigators is the motive for his arrest and for his later targeted murder. In that narrative, Magnitsky's death was an example of a corrupt cabal getting rid of someone that could prove dangerous to them. That is the core of the story Browder has to tell.
Browder describes Magnitsky as a crucial whistleblower. But that is a construct that was concocted after the fact. Several people from Browder's team had leveled the same or similar accusations against Russian officials, and some of them did so before Magnitsky:
- Browder's lawyer Eduard Khairetdinov made an official complaint in early December 2007 (PDF from Browder's website).
- Paul Wrench on Dec. 10, 2007 (PDF from Browder's website).
- According to Browder, Magnitsky first testified on the issue on June 5, 2008. In that testimony, he spoke of the raids and the confiscation of files that he believes - he chooses his words carefully - could have been used for the seizure of the companies. He doesn't speak of the vast tax fraud plot. On his website, Browder writes that Magnitsky at that point in time had not yet discovered the fraud.
- A week previously, though, on May 28, 2008, a different Browder associate named Grant Felgenhauer wrote in a letter to the Russian president's Anti-Corruption Council of the suspicion that the true goal of the assailants was the refund of taxes worth hundreds of millions of dollars (PDF from Browder's website: The passage in question can be found at the top of page 3; Felgenhauer speculates about a total of over $300 million).
The media also reported on events: The financial newswire Bloomberg, the Financial Times and the Wall Street Journal all published reports in early April 2008.
On July 24, 2008, the New York Times also published details of the fraud, valued at over $230 million (read the article here). Magnitsky, though, only first spoke of the case in official testimony given on Oct. 7, 2008.
This timeline of events is one reason why observers have their doubts as to whether Magnitsky was really murdered so that he would cease making accusations against law enforcement officials. The accusations against Russian officials were already public, independent of Magnitsky's testimony.
Human rights activist Zoya Svetova has been keeping close tabs on the case from the very beginning and described the situation in an interview with DER SPIEGEL last summer as follows:
DER SPIEGEL: What do you think about the narrative according to which he was the victim of a targeted killing. Is there proof?
Svetova: No. There is not proof at all. What sense would it make to murder him? None at all.
DER SPIEGEL: Because he knew of a $230 million fraud.
Svetova: Yes, but he wasn't the only one who knew of it, the entire leadership and co-workers knew of it. It had been written about in the newspapers. Magnitsky did not reveal any secret.
DER SPIEGEL: In your report, though, it is mentioned that he had possibly been pressured in prison.
Svetova: When he was in prison, officials wanted testimony from him against Bill Browder. But he didn't provide any. And he probably never would have done so. But it still would have made no sense for them to kill him because of that.
Svetova agreed to that interview, and to its being recorded, in July 2019. But she has argued in the past as well that there is no proof for a targeted murder of Magnitsky. In 2014, for example, she wrote that she couldn't imagine someone having intentionally brought about Magnitsky's death ("Now that five years have passed, I don't think this killing was intentional." -original in Russian.)
Shortly before DER SPIEGEL published its story in November, she said that those were, in fact, her words, but that she had changed her mind and now believed that a targeted killing was a possibility. Svetova's change of heart is transparently discussed in the DER SPIEGEL article.
3. The Motive for Magnitsky's Arrest
Browder claims that Magnitsky was arrested to pressure him to retract his testimony against the police and that that is why he was tortured and murdered. But Magnitsky's lawyer at the time of his arrest told a different story from the very beginning. Dmitry Kharitonov told DER SPIEGEL back in fall 2009 that his client was little more than a hostage and that officials had merely wanted to exert pressure on Bill Browder (read the German-language article here).
The term "hostage" is one that Kharitonov used frequently. In an interview with the Russian version of the magazine Forbes, Kharitonov said that Magnitsky himself had testified: "Your Honor, I have been taken as a de-facto hostage. Hardly anyone is interested in my person, everyone is interested in the head of Hermitage." (Russian version.)
The human-rights activist Zoya Svetova presented a similar version in her interview with DER SPIEGEL last summer.
Svetova: In the person of Magnitsky, the two largest deficits of the Russian judiciary and the Russian investigative system are united. When a case is opened against a company and it isn't possible to arrest its boss, then they take his assistant or his deputy or just an employee as hostage. We have seen that in many cases. It happened with Mikhail Khodorkovsky's company Yukos. ( ) They first take a hostage. Magnitsky was a hostage. He himself was of no interest to them. They wanted Browder.
DER SPIEGEL: But Russian officials had thrown Browder out of the country.
Svetova: They wanted Magnitsky to tell them all of the terrible things Browder had allegedly done. They wanted (Magnitsky) to discredit him, (to say) that he was a fraud and tax evader. Even though they had stolen his companies from him.
Svetova related this position on several occasions, such as in comments she made to Radio Liberty in 2014.
The investigative report from 2009, which Svetova helped write, includes evidence that investigators and prison leadership exerted pressure on Magnitsky. There is also a related quote from Magnitsky in the report, in which he says that the conditions of his imprisonment were made worse in consultation with the investigator in the case against him, a man named Oleg Silchenko. Their goal, Magnitsky said, was to force me "to accept false accusations and to incriminate myself and others." The report mentions nothing that might support Browder's claim that authorities were trying to force Magnitsky to retract his testimony.
The original Russian version of the report can be found on Browder's website (PDF). Whereas the Russian text does not include the name of the investigator Kuznetsov, the English translation that can likewise be found on Browder's website makes express mention of him (PDF).
4. Alleged Evidence of a Targeted Murder Plot
As alleged proof for his theory of a targeted murder, Browder provides photos of haematomas on the hands of the deceased. Some are presumably from handcuffs, while others could be from Magnitsky's desperate punches against a door. The photos do not reveal a fatal injury.
This does not rule out the possibility that Magnitsky was killed by external force. But it likewise does not provide evidence of a targeted murder through beatings from eight prison guards over a period of one hour and 18 minutes, as Browder has repeatedly claimed.
The at times contradictory statements from the Russian authorities about the cause of death are disturbing, but this is not sufficient proof of a targeted murder. The use of a rubber truncheon was also mentioned in the DER SPIEGEL article.
Read Browder's letter to DER SPIEGEL here:
5. Magnitsky's Supposed Testimony against Officers Karpov and Kuznetsov
Browder accuses DER SPIEGEL of misrepresenting the true substance of Sergei Magnitsky's testimony. In truth, according to Browder, Magnitsky clearly identified the police officers Kuznetsov and Karpov as guilty in testimony he gave prior to his arrest.
However, Magnitsky does not make any personal accusation directly against Karpov and Kuznetsov in either of the two documents.
6. The Role of the Police Officer Karpov in the Magnitsky Case
Browder accuses DER SPIEGEL of spreading police officer Pavel Karpov's claim that he had nothing to do with Magnitsky's death or with the tax fraud. Yet it is a journalist's duty to give people accused of serious offenses the opportunity to comment. This also applies to Karpov.
Magnitsky's lawyer, Dmitry Kharitonov, has stressed several times (including in this interview with the Russian radio broadcaster Echo of Moscow) that Pavel Karpov had no role in the prosecution of his client. Kharitonov repeated this statement to DER SPIEGEL twice. In the summer of 2019, the human rights activist Zoya Svetova even said: "But there is no evidence that Karpov put pressure on Magnitsky."
Furthermore, the High Court of Justice in London also found that Browder's allegations against Karpov were not sufficiently substantiated.
7. The Question of Money
Browder is critical of the DER SPIEGEL report for not delving deeper into the matter of the $230-million fraud. In doing so, he refers to findings by U.S. investigators in the New York case (see PDF).
However, the case is less clear-cut than Browder suggests. The responsible U.S. investigator admitted during questioning that his findings were based exclusively on statements and documents from Browder and his team. The trial ended in a settlement. The Russian Katsyv clan, whom Browder accuses of profiting from the tax fraud, has ensured that the settlement statement contains an explicit mention that it had nothing to do with the Magnitsky case.
Read the Katsyv settlement here:
Browder was questioned during the proceedings. Under oath, he was unable to explain how he and his people managed to track the flow of money. Videos of his statement found their way to YouTube and a transcript is available on Pacer.gov, an electronic database for documents from U.S. proceedings.
Read Browder's testimony here:
Browder was given a chance to comment extensively on all the points raised by the DER SPIEGEL report, including during two separate two-hour-long interviews last summer.
In addition, DER SPIEGEL also sent Browder further questions on Nov. 21 concerning facts of the case that went beyond those outlined in the published article. Browder did not respond.