Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Russian Graft: The Video

Hermitage Capital Management, once the largest foreign investor in the Russian stock market, has accused police officials, bankers, judges and lawyers of working with gangsters to steal $230 million from the company and using its documents to obtain another $230 million from the Russian treasury through fraudulent tax refunds. Hermitage’s latest complaint, according to the Washington Post, accused “several bureaucrats in two Moscow tax agencies of involvement in the crimes and lists more than 30 suspicious tax refunds issued by the agencies between 2006 and 2008, as well as the account numbers of the recipients.”

The paper said criminals seized control of Hermitage’s Russian assets after its U.S.-born chief executive, William F. Browder, was expelled from the country in 2005. The Interior Ministry said it acted against Hermitage because of financial crimes and wants to charge Browder with tax violations.

Browder, meanwhile, has posted a video on YouTube in English and Russian that accuses authorities of complicity and active involvement in the theft and fraud. In the video, he says officials raided the Russian offices of Hermitage and those of its Moscow lawyers on a pretext and seized all of the company’s official documents, seals and accounting records. The items were then used by convicted criminals and others to gain control over the company’s assets and later pull off the tax fraud, Browder said.

A story posted by Hermitage (here) described Browder as an activist fund manager who conducted a campaign that “exposed widespread theft and corruption at Gazprom,” Russia’s biggest company that was formed from the former Ministry of Gas Industry of the Soviet Union. Browder was unable to renew his visa despite help from Jack Straw, the former British Foreign Secretary, and the European Commission. The report also said:

Mr. Browder met Dmitry Medvedev . . . at the World Economic Forum in Davos in January 2007 and requested his assistance in renewing his visa. A month later, Hermitage received a call from Lieutenant Colonel Kuznetsov [from the Russian Interior Ministry], indicating that he was aware of Mr. Browder’s visa difficulty. According to Hermitage, the Interior Ministry officer sought a meeting at Hermitage offices. He said: “My answer will depend upon how you behave, what you provide … the sooner we meet and you provide what is necessary, the sooner your problems will disappear.”

According to its website, Hermitage Capital Management was founded in 1996 by William Browder and the late private-banker extraordinaire, Edmond Safra. Hermitage, headquartered in London, says its clients include “international financial institutions, corporations, pension funds, public endowments, investment advisors, family offices and high net-worth individuals.”

President Medvedev, 45, has often promised to fight corruption. Russia ranks a lowly 147th on the Corruption Perception Index, tied with Bangladesh, Kenya, and Syria. Like his American counterpart, Medvedev is a former law professor. His Kremlin bio says he graduated from the Faculty of Law at Leningrad State University in 1987 and completed his PhD there. He then taught law as an associate professor at St. Petersburg State University from 1990 until 1999.

Share this post


Comments are closed for this article!