Magnitsky and Toting Up the Deadly Price of Legal Defense

The last several years have proven dangerous for Russian lawyers. Vasily Aleksanyan, lawyer for fallen oligarch Mikhail Khodorkovsky, was jailed for two years before being released last year, stricken with AIDS and cancer. Stanislav Markelov, a lawyer who robustly challenged a Russian military officer who raped a teen-ager, was shot dead on a Moscow street early this year.

Given this playing board, why do Russian lawyers continue to involve themselves in politically charged cases in the country? And in the same vein, why do Western managers employ them rather than sticking with Western lawyers who, in a fix, at least have a foreign passport and thus a chance at protection?

The latest victim of this set of circumstances is Sergei Magnitsky, a lawyer for American investor William Browder, who was buried yesterday in Moscow after dying in a Russian prison. Browder, the head of Hermitage Capital Management and once Russia's most prominent foreign investor, has been persona non grata in the country for three years. Magnitsky, a partner with the firm Firestone Duncan, was helping Browder to build a $230 million tax fraud case.

I asked Browder for the background on how Magnitsky happened to get stuck in Russia when other associates fled, and about the wisdom of employing Russian lawyers in such cases. His emailed response:

We hired four different law firms to help us untangle the complicated fraud that we were victims of in 2007. After much investigative work by the lawyers, it became clear that the main purpose of the theft of our investment companies by interior ministry officers was to use those companies to fraudulently reclaim $230 million of taxes that we paid a year earlier. The fraudulent tax refund requests for $230m were processed in two days. After that, two of the four law firms wrote and filed criminal complaints about the theft of budget money. The interior ministry immediately opened criminal charges against those lawyers. We got those lawyers out of Russia and safely to the UK. Then the Interior Ministry started going after Magnitsky. He wasn't scared because he had never done anything wrong and he believed that the law protected him. Even after much discussion from our side to leave, he insisted on staying. His life was in Russia and he didn't want to be uprooted. He testified in October 2008 against Lieutenant Colonel Artoum Kuznetov for his involvement in the stolen $230 million and a month later, Kuznetzov arrested him and put him in pre-trial detention on spurious tax charges. Over the course of the year, the investigators kept pushing Sergey to sign papers admitting to various crimes and implicating me as his accomplice. He always refused, and they kept moving him to worse and worse conditions to try to break him. He developed medical problems and they refused him treatment unless he confessed to the false crimes. He continued to refuse, but at the same time, in October 2009, Sergey gave even more incriminating testimony on Kuznetzov to the State Investigative committee. A month later he was dead.

Magnitsky apparently somehow felt himself bullet-proof. But he wasn't. The playing board is fairly clear -- there is a mortal risk not just for lawyers, but for executives of companies that end up crossing local or federal authorities, or politically powerful businessmen.

So one poses the question: Regardless of whether Russian lawyers themselves are willing to work on such matters, should foreigners employ them?

Radio Appearance

I was interviewed about murder and death in Russia on My Technology Lawyer, a radio show hosted by Andrew Kreig and Scott Draughton.