Accessibility links

Breaking News

Lawyer's Death Puts Spotlight On Kremlin's Battle With Investment Fund

Magnitsky had complained about the conditions at Butyrka prison
Magnitsky had complained about the conditions at Butyrka prison
A Russian lawyer representing the embattled Hermitage Capital investment fund has died in a Moscow prison after complaining for weeks that he was denied adequate medical treatment.

Russian officials say Sergei Magnitsky, a 37-year-old attorney with the Moscow-based law firm Firestone Duncan, died of toxic shock and heart failure on November 16 after spending nearly a year in jail awaiting trial on tax-fraud charges.

Magnitsky had steadfastly denied the charges against him. His colleagues say police and prosecutors had been pressuring him to provide false testimony against Hermitage Capital and its founder, William Browder.

Magnitsky's colleagues say denial of medical treatment was part of that pressure.

"He died of a very treatable condition that required a very simple operation and medicine that the police simply refused to give him because he wasn't cooperating with them in doing what they wanted him to do. It's really that simple," Jamison Firestone, managing partner of Firestone Duncan tells RFE/RL's Russian Service.

Magnitsky's death is the latest development in a long-standing battle between the Kremlin and Hermitage Capital, once the largest private investment fund in Russia. Supporters of Hermitage say the ongoing saga illustrates a complex nexus linking business, law enforcement, and organized crime in Russia -- and the dangers involved in challenging these vested interests.

"They are the new mafia. They are feared. They are criminals in uniform," Firestone says of Russia's law enforcement bodies.

"I am not saying that there are no honest police officers. But the norm is that most people serving in law enforcement are dishonest and most people working as prosecuting judges are dishonest. And we are losing the country to these people."

Cops, Crimes, And Taxes

Hermitage Capital was once among the most prominent investors in Russia and Browder, its CEO and co-founder, was a strong booster of Vladimir Putin, whom he hailed as a reformer.

As its prestige grew, Hermitage became known for acquiring large stakes in major Russian companies such as Gazprom and Surgutneftegaz, and then pushing them to be more transparent. In 2005, Browder -- a U.S. citizen whose grandfather, Earl Browder, led the American Communist Party from 1934-35 -- was barred from entering Russia on unspecified national security grounds.

That's when Browder began a campaign to warn foreign investors away from Russia.

In June 2007, police raided Hermitage's offices and seized the company's founding documents as well as the stamps and seals used to identify officials company papers. Hermitage retained Firestone Duncan to represent it and Magnitsky was assigned the case.

The investment fund claims Magnitsky uncovered how Hermitage's seized documents were used by organized crime groups -- with help from the Interior Ministry, tax officials, and the justice system -- as part of a scheme to take over three companies in the fund's portfolio. Hermitage says that once under new management the companies then received $230 million from the Russian treasury by filing for -- and quickly receiving -- fraudulent tax refunds.

Magnitsky testified in June and October 2008 against two police officers who conducted the June 2007 raid of Hermitage, including Lieutenant Colonel Artyom Kuznetsov, who led it.

In November 2008, months after he testified the last time, Magnitsky was arrested and charged with orchestrating a scheme to assist Browder evade more than 100 million rubles ($3.25 million) in taxes in 2002 -- with Kuznetsov acting as a key investigator in the case.

"He uncovered a major crime that the Moscow Interior Ministry had executed. Sergei had testified against a number of police officers," Browder told RFE/RL's Russian Service in October.

"In Russia it is a big crime to point out the crimes of police officers. So these very same police officers who he implicated in the crime went and arrested him."

Medical Requests Ignored

Magnitsky was diagnosed with pancreatic problems in August of this year, after months in prison.

Irina Dudukina, a spokeswoman for the Interior Ministry, told "The Moscow Times" that Magnitsky's death on November 17 "was a complete surprise," adding that "he didn't complain about his health to the judge or to the investigator."

But Magnitsky's lawyer, Dmitry Kharitonov, said he was shaking and visibly ill last week at his most recent court appearance.

In September, Magnitsky wrote separate appeals to Russian Prosecutor-General Yury Chaika and to officials at the Butyrka prison, where he was incarcerated, describing his harrowing detention conditions and pleading for medical attention.

"My medical appointments and examinations are not carried out. Repeated requests to be allowed to see a doctor have been essentially ignored," Magnitsky said in a handwritten note to prison officials, made available to RFE/RL's Russian Service (see above).

He added that he was "not given any medical recommendations regarding this illness and there was no effort to provide me with the necessary diet."

According to media reports, Magnitsky's mother went to Butyrskaya on the morning of November 17 to bring him some personal items but was told that he had been moved to the Matrosskaya Tishina detention center, which has better medical facilities. When she went to Matrosskaya Tishina, officials informed her that Magnitsky had died the previous night.

A Country He Believed In

In recent years, Russian attorneys -- particularly those that represent the Kremlin's foes -- have come under increasing pressure.

In July 2007, prominent defense attorney Boris Kuznetsov fled the country after Russian prosecutors accused him of divulging state secrets. Kuznetsov had been defending a politician against embezzlement charges that were based on illegal wiretaps. When Kuznetsov brought the wiretaps to light, he was charged.

And in January of this year, human rights lawyer Stanislav Markelov -- who had represented terrorism suspects, muckraking journalists, and Chechen civilians who accused the Russian military of abuse -- was gunned down in broad daylight in downtown Moscow.

Six other lawyers connected to the Hermitage case have either fled the country or went into hiding. Firestone says that prior to his arrest last year, he recommended that Magnitsky do the same -- but he refused.

"He said I'd been watching too many movies and that this wasn't the 1940s," Firestone said.

"Russia is a country that he really believed in. He believed in Russian law and in not living in fear of criminals. So he did the right thing. He wasn't stupid. He realized there was risk. But he still believed that there was enough law in Russia that this couldn't happen to him."

RFE/RL's Russian Service contributed to this report

RFE/RL has been declared an "undesirable organization" by the Russian government.

If you are in Russia or the Russia-controlled parts of Ukraine and hold a Russian passport or are a stateless person residing permanently in Russia or the Russia-controlled parts of Ukraine, please note that you could face fines or imprisonment for sharing, liking, commenting on, or saving our content, or for contacting us.

To find out more, click here.