Swiss rapporteur denounces Magnitsky ‘cover-up’

The Moscow grave of lawyer Sergei Magnitsky, who died in jail Keystone

Russian authorities have been accused of covering up the persecution and death of whistle-blower Sergei Magnitsky, who exposed massive tax fraud, in a hard-hitting Council of Europe report by Swiss parliamentarian Andreas Gross.

In the first comprehensive independent report into the case, Gross concluded: “Corrupt officials must not be allowed to plunder State property whilst brutally silencing those standing in their way, with impunity.”

The cover-up surrounding Magnitsky’s death in custody in November 2009 and the crimes he was attempting to expose must be reversed and the true culprits held to account, Gross added.

Elected rapporteur for the case in November 2012, Gross presented the findings of his six-month review of the events linked to the lawyer’s death to the human rights and legal affairs committee of the Council of Europe on Tuesday.

Magnitsky’s former client Bill Browder, who is leading a global campaign for justice for the dead lawyer and who is facing legal action himself in Russia, welcomed the Council of Europe report.

“This report is a detailed and objective analysis which destroys the Russian government’s position on nearly everything they have said about Sergei Magnitsky’s murder on a line-by-line basis,” he told swissinfo.ch.

‘Gigantic robbery’

In 2007 Magnitsky uncovered the largest tax refund fraud in Russian history ($230 million), involving the theft of companies belonging to Browder, formerly one of the most successful foreign investors in Russia through his firm Hermitage Capital Management.

“Sergei Magnitsky had denounced a gigantic robbery whose victim was Russia herself. He died because he refused to give in to the pressure that corrupt mid-level officials had put on him in order to get away with their crimes,” Gross wrote in his 41-page report, entitled Refusing Impunity for the Killers of Sergei Magnitsky.

“Why, then, does the Russian state, and at such a high level, try so hard to cover up this crime?” asked the Swiss parliamentarian and chair of the social democratic group of the Parliamentary Assembly of the Council of Europe.

Following a general discussion on Tuesday in Strasbourg, the Council of Europe committee decided to declassify the draft report and issued an invitation for any interested parties – including the Russian authorities – to comment on it, with a view to approving the resolution based on the report at its meeting on September 4.

“We would like to hear a [Russian] response that brings us closer to the truth, not one that attempts to hide it,” Gross told swissinfo.ch.

The Russian government has repeatedly rejected allegations of wrongdoing in connection with the case. Alexei Pushkov, head of the international affairs committee of the Russian parliament, said the Russian side was not satisfied with Gross’ report, the Russian news agency RIA Novosti reported.

Pushkov pointed out that “the report itself is a result of the political convictions that prevail in the West on this subject” and contains a number of “factual inaccuracies”.

Sergei Magnitsky’s death

While working for an American law firm in Moscow in 2007, Sergei Magnitsky uncovered the largest tax refund fraud in Russian history ($230 million), involving the theft of companies belonging to his client Bill Browder, formerly one of the most successful foreign investors in Russia through his firm Hermitage Capital Management.
 
For his efforts the 37-year-old lawyer was falsely arrested and held in pre-trial detention for 11 months, where he suffered ill-treatment, medical neglect and a suspected beating resulting in his death in a Moscow prison cell.

Changes made to Magnitsky’s death certificate, the refusal to grant the family’s request for an independent autopsy and major inconsistencies in the accounts of his death give “strong indication of an official cover-up,” according to Gross.

Gross condemns in strong terms the “belated, sluggish and contradictory” investigations carried out by the Russian authorities into Magnitsky’s death in custody. Of the two doctors indicted for negligence, one had her case terminated while the other was acquitted. 

Fact finding

Following fact-finding missions to Russia, Cyprus, Switzerland and Britain and interviews with key parties, Gross dismissed as “unconvincing” and “doubtful” the explanations offered by the Russian government authorities who exonerated officials for their role in the thefts and then blamed Sergei Magnitsky himself, after his death, for the crimes that he had uncovered.

Part of the Magnitsky money trail led to Switzerland. In January, the Swiss Federal Prosecutor’s Office announced it was freezing additional accounts in connection with its money laundering investigation into “persons unknown” in the Magnitsky case.

On Wednesday, the Swiss Federal Criminal Court rejected an appeal which attempted to prevent it from providing administrative assistance to Russia, giving the green light for the transferral of bank data to Russia related to the Magnitsky affair (see Data to Russia infobox).

Regarding Magnitsky’s death in detention, Gross deems unacceptable the official Russian position, “namely that Mr Magnitsky’s death is merely the tragic consequence of his being unable to withstand the normal rigours of detention”.

Gross provided a detailed list to the Russian authorities naming medical and prison personnel he wished to speak to who were referred to in a previous Russian investigation, but “these meetings never materialised, despite several attempts from my side”.

Fraud discovery

Magnitsky is currently the subject of an unprecedented posthumous prosecution, which claims he was the perpetrator of the tax fraud he is known to have uncovered. These charges, which have also been made against Browder in absentia, are “legally unfounded” according to Gross.

The report cites evidence that the same persons and officials were involved in a series of thefts from the Russian budget over a long period of time, both before and after the $230 million theft, using the same Moscow tax offices.

“A very strong argument against blaming the $230 million tax reimbursement fraud on Sergei Magnitsky himself is the fact that similar tax reimbursement frauds were committed before and after Mr Magnitsky was taken into custody, and even after his death,” said the report.

Gross concluded: “I am personally convinced that this crime was not committed or in any way aided or abetted by Mr Magnitsky, but by a group of criminals, including the persons he had accused before these persons took him into custody, where he died.”

Concerning the new case opened by the Russian government and accusing Hermitage Capital of “stealing” Gazprom shares, Gross found it to be an example of “selective justice” and “indicative of politically motivated cases”.

Data to Russia

The Swiss Federal Criminal Court has given the green light for the transferral of bank data to Russia related to the Magnitsky affair. The information concerns the account of a company connected to Alexander Perepilichny, who died in London last year.

Perepilichny was one of the key informants in the controversial Magnitsky case, interviewed by Swiss prosecutors. He collapsed and died while out jogging last year. 

Following a Russian request for administrative assistance, the Swiss Federal Prosecutor’s Office approved the transfer of the relevant account information to the Russian Federal Prosecutor in February.

The Swiss Federal Criminal Court has now rejected the appeal against this decision from a related company, which, it said, failed to establish failures in the Russian legal proceedings connected to the case.

Impunity

The report labels as “unacceptable” the on-going impunity of those responsible for Mr Magnitsky’s death and for the massive theft of public funds that Magnitsky had exposed.

Gross notes that the objective of his report is to “contribute to a better protection of individuals against lawless behaviour of state officials in future”.

The case continues to have international repercussions. Under the Magnitsky Act, the United States has imposed visa bans and frozen the assets of 18 Russians linked to the alleged crime. In response, Moscow barred US citizens from adopting Russian children.

Browder believes the details of the Russian government’s conduct in the Magnitsky case are so damning “that they will provide fresh impetus for various EU member states to push for Magnitsky sanctions going forward”.

But Gross does not hold that imposing sanctions against individuals is the best course of action. “Sanctions are the most primitive response we have after military action,” he told swissinfo.ch.

“This approach is too easy. We want to improve the daily life of Russian people, make sure that collected taxes are used for essential services and not stolen from them. The idea is not only to punish those responsible but to prevent this kind of persecution from happening again.”