I thank the committee for the invitation today to tell the story of what happened to Sergei Magnitsky. As the Chairman said, he was my lawyer in Moscow who was murdered in police custody on 16 November 2009. It is my duty to his memory and his family to make sure that justice is done. I have been working to that end for the past three and a half years. In order to inform the committee about the campaign and what I hope can be done in this country, I will outline the background to the story, first about myself and then about Sergei Magnitsky.
In 1996 I set up a business to invest in the Russian stock market in Moscow. My company, Hermitage Capital Management, became the largest investment fund in Russia. We discovered that a number of the companies in which we had bought shares were run in a highly corrupt fashion. We decided that in order to stop the corruption, we would expose it by doing what we called forensic research and ensuring it would be made available to the international media. The public naming and shaming campaigns were quite successful but the more successful we became in exposing corruption, the more angry those who were corrupt became. On 13 November 2005, as I was flying back to Russia, having lived there for ten years and become the largest foreign investor in the country, I was stopped at the border and detained for 15 hours and then deported back to the UK where I had begun my trip. After that it became clear that I was being persecuted by the Russian Government and I quickly got my employees out of the country and liquidated our holdings there in the hope that it would be the end of the story. It turned out that it was not the end but the beginning of the worst nightmare anyone could ever experience under pretty much any circumstances.
About 18 months after I was expelled, 25 police officers from the Moscow interior ministry raided my Moscow office, and 25 more officers raided the office of my American law firm, Firestone Duncan. One of the young lawyers there looked at the search warrant and said it did not give entitlement to take the documents they wanted to take. They pulled the young man into a conference room and beat him viciously. He was hospitalised for three weeks. The documents that were seized during the raid were used three months later to fraudulently re-register our investment holding companies out of our name into the name of a man named Viktor Markelov who had been convicted of murder several years previously and let out of jail early by the interior ministry. At that point we became extremely disturbed by the pattern of events and we hired another lawyer named Sergei Magnitsky. He was 36 years old. He worked for the law firm, Firestone Duncan. He was one of the smartest lawyers we knew in Russia. We sent Sergei out to investigate what was going on, why the raid was carried out and what the objective was.
Sergei investigated and came up with pretty unbelievable conclusions. He concluded that the officials that had taken the documents had used them first of all to try to steal all of our assets, but did not succeed because they had already been liquidated and taken out of the country. As a second step the group of corrupt officials used the documents to steal not our assets but $230 million dollars of taxes that we paid in the previous year. They had gone through a complicated scheme whereby they applied for an illegal tax refund using the documents seized in our offices. They applied on 23 December 2007 and the tax refund was approved and paid out the very next day. It was the largest refund in tax history.
We believed that this must have been a rogue operation. It could have been acceptable and even authorised by the Government to steal a foreign investor’s assets but it is hardly imaginable that they could have been allowed to steal €230 million of taxes that were paid to the state. Sergei testified against the police officers who were involved in the raid in June 2008 and again in October 2008. Shortly after his testimony two subordinates of one of the officers who was named in his testimony came to his house on 24 November 2008 at 8 a.m. and arrested him. He was put in pre-trial detention and they began to torture him to withdraw his testimony. They put him in a cell with 14 inmates and eight beds, and left the lights on twenty four hours a day to sleep deprive him in the hope that after a week of it he would recant his testimony against the police officers. They then presented him with a confession to sign in which they asked him to confess to the theft of the stolen tax money that he had discovered and exposed. Sergei refused. They then put him in a cell with no heat and no window panes in December in Moscow, and he nearly froze to death. They put him in a cell with no toilet, just a hole in the floor, where sewage would bubble up. They did a number of other terrible things and after approximately six months he became sick. He developed severe stomach pains, lost 20 kg and was diagnosed with pancreatitis and gallstones. He needed an operation which was scheduled for 1 August 2009.
One week before the scheduled operation, he was abruptly moved from a prison with medical facilities to a maximum security prison called Butyrka, which is considered to be one of the toughest prisons in Russia, and most significantly for Sergei, there were no medical facilities there. At Butryka, his health completely broke down and he went into a downward spiral of pain and ill health. He and his lawyers made more than 20 desperate requests for medical attention to various branches of the Russian penal system. Every single one of them was either ignored or rejected. We have written copies of some of the rejections to his desperate pleas for medical attention. On the night of 16 November 2009, Sergei fell into a critical condition. Only then did they agree to move him to a prison with medical facilities. When Sergei arrived at the prison with medical facilities, instead of treating him, they put him into an isolation cell and allowed eight riot guards with rubber batons to beat him for one hour and 18 minutes until he died at the age of 37.
One could ask how we know all of this. Up until the last night of his life Sergei wrote it all down. He wrote 450 complaints about his mistreatment and the misuse of the justice system to torture him. Those complaints document who did what, when, how and where. Since he died we have been able to corroborate all of his testimony with documents from the Russian penal system.
They are not very good at covering up their crimes and, for example, we have documents showing the signature of the head of the prison authorising the use of rubber batons on him in the last night of his life. We have the signatures of people in the penal system that denied him medical attention. We have the signatures of the police officers who fabricated evidence, which we can prove to be fabricated, to arrest him. Given all of this evidence and at this point this truly is the most well-documented human rights abuse case to have come out of Russia in the past 35 years, we assumed that given the profile of this case, given the level of evidence and most importantly, given that President Medvedev or now ex-President Medvedev, had called for an investigation one week after he died, the people who committed this crime would be prosecuted. Three and a half years later, not a single Russian official has been prosecuted for the false arrest, torture and murder of Sergei Magnitsky. They all have been exonerated. Some of them have been given big promotions and some have been given state honours. In fact, on the first anniversary of Sergei's death, six people who were involved in this case were given special Interior Ministry honours, which is the highest honour one can get in the Interior Ministry. Most shockingly, the only prosecution that has happened is the prosecution of Sergei Magnitsky himself. On 4 March, they intend to resume the case against Sergei Magnitsky and against me in court. They are prosecuting Sergei Magnitsky in the first-ever posthumous trial in the history of Russia and one of the very few posthumous trials anywhere in the world in the past 1,000 years. To make matters worse, since Sergei is not there to defend himself in this trial, they have summoned his mother and widow to be the representatives of the defendant in this unprecedented legal procedure. Moreover, just today Sergei's brother-in-law has been summoned for interrogation at the Interior Ministry in Moscow.
The conclusion one can draw is there is absolutely no chance of getting any kind of justice for Sergei Magnitsky under the current regime in Russia. From that conclusion, we decided that if we could not get justice for Sergei in Russia, we should try to get justice for him outside Russia. How does one get justice outside Russia? There is no jurisdiction in Ireland, the United Kingdom or anywhere else for the murder in Russia of Sergei Magnitsky. We cannot prosecute them for murder or various other crimes. However, the one thing we do know about this crime is it was not a crime of ideology or religion but was a crime of money. This was a crime of money concerning $230 million. The people who committed this crime and who commit crimes just like it - there are many other crimes just like it in Russia - like to keep their money outside of Russia. They do not want to keep their money in Russia because it is not safe there. Consequently, they keep their money in France by buying villas, or in America and the United Kingdom. There probably is some of their money in Ireland. They like to keep their families out of Russia and like to travel and to vacation abroad. Basically, they like to have the freedom, the security and the rule of law in the West. They like to commit their crimes in Russia and then have all this great stuff in the West. We thought that if we could take that away from them, it may not be justice in the true sense of the word but it is at least a small step towards pricking this bubble of impunity that exists in Russia.
Consequently, I went to the Congress of the United States in April 2010 and suggested this to a bipartisan group of Senators. They liked the idea and as a result, we ended up with Senator Benjamin Cardin, who is a very liberal Democrat, and Senator John McCain, who is a very conservative Republican, teaming up and proposing what has become known as the Magnitsky Act, which would impose visa sanctions and asset freezes on the people who killed Sergei Magnitsky. It went through the process of various committees and in November 2012, the Senate voted on the law with a 93% approval. The House of Representatives also voted on the law and on 14 December, Barack Obama signed the Magnitsky Act into law. It is now a federal statute in the United States. As I stated, this would name names, ban visas and freeze the assets of the people who killed Sergei Magnitsky. In parallel, the European Parliament considered the same law and in November, shortly before President Obama signed the law in America, passed its own version of the Magnitsky Act calling on the European Council to impose EU-wide visa sanctions and asset freezes on the people who killed Magnitsky. I should point out that the law in America and the law in Europe do not simply apply to Magnitsky. While Magnitsky is the name on the law, it also applies to other gross human rights abusers in Russia.
I will turn to what I am doing here and what I hope to achieve in Ireland. It is a great pleasure to be in Ireland because of all the countries to which I have travelled, and I have travelled to about 13 countries, this is one of the countries in which I am speaking the same language in terms of both language and values. This is a place where people understand right and wrong and what should be done. I have got a very warm reaction in all the one-on-one meetings I have had today before coming to testify here. What I hope will happen here in Ireland is something we also have done in a number of other European Union member states, which is that I would like this joint committee to put forth a resolution calling on the Irish Government to impose visa sanctions and asset freezes for the people who killed Sergei Magnitsky and the people who perpetrate other gross human rights abuses in Russia. The joint committee should ask the Government to do the same thing here. In addition, Ireland is punching well above its weight at present by holding the Presidency of the European Union and it could use that opportunity to further what already has happened in the European Parliament. There is an opportunity to have the Government call on the European Council to discuss and to pass the EU-wide Magnitsky sanctions that were proposed at the European Parliament. I learned about the story of Veronica Guerin and the Criminal Assets Bureau here, which essentially has the same objectives as the Magnitsky Act. The final thing I would ask Members of the Oireachtas to do is to amend the Criminal Assets Bureau legislation to include the people who killed Sergei Magnitsky and similar crimes of that nature.
I wish to finish my thoughts there but will share one last observation, which is that when I propose these things, this is not the West beating up on Russia. The people in Russia, albeit not the regime in Russia, are all in favour of this. They have no tool available to them at present to deal with the impunity, the criminality and the kleptocracy of their regime. Civil society, all the opposition and everyone outside the Putin regime is cheering for this. One can see it in anecdotal terms but one can also see it in quantitative terms. A poll was conducted in Russia asking how many people supported the foreign Magnitsky Act-type of legislation and only about 40% of the population had heard of it and approximately 60% had not. However, of that 40%, two thirds of Russians support Magnitsky-style legislation and only one third are opposed to it. I thank members for this opportunity and of course will be glad to answer any questions from any one.
