A Cancelled Reset

US-Russia: Another Cold Breeze

Igor Alisow, Tver district court judge in Moscow, is to finally start interrogations, which have been postponed several times, in the trial of the lawyer Sergei Magnitsky and his former client William Browder. The prosecution accuses the two men of tax evasion. The lawsuit is kept secret and is so extraordinary that the dock, guarded by two broad-shouldered policemen and secured with thick bars, remains empty. Browder is being tried in absentia — he lives in the UK and has no intention of showing up in Russia; besides, for a number of years he has failed to get an entry visa. The second defendant is certainly not expected to appear either — he died in November 2009 and lies at the Transfiguration Cemetery in Moscow.

In Poland, the so-called Magnitsky case is not well-known, even though it has been discussed by general prosecutors in several European countries, as well as in the U.S. Congress and the European Parliament. Moreover, a Council of Europe rapporteur is working on an independent report. It started a decade ago with Hermitage Capital Management, the largest fund in Russia, which was headed by the said Browder. If only he had settled for buying companies, he would still be a primary star in Russian business. However, Browder, a British national, openly denounced the corruption and lack of transparency in interests between national companies. As a result, he was prohibited from entering Russia. Later, he was charged with tax evasion and, in 2007, Ministry of the Interior officers thoroughly searched his Moscow office and confiscated all documents found there.

Sergei Magnitsky, hired by Bowder, found that the Ministry of the Interior officers gave these documents to the mafia, which made use of them in taking over some companies belonging to Hermitage Capital Management. Further, criminals were put in charge of the companies: a burglar, a thief and a convicted murderer, whose sentence had just been reduced. The new owners testified in court that their companies were barely making ends meet and was heavily indebted; they asked for a refund of overpaid taxes. On the decision of two Moscow IRS officials, the refund was granted; on Dec. 24, 2007, the equivalent of U.S. $230 million was transferred to the company’s accounts. Magnitsky alerted judicial authorities and, in November 2008, he himself was arrested on charges of covering up Browder’s criminal activities.

Magnitsky was sent to Butyrka, a detention center in Moscow, and then to solitary confinement in Matrosskaya Tishina prison. In Russia, pre-trial detention facilities are used to intimidate prisoners and are, therefore, kept in terrible condition. Prison authorities did not allow Magnitsky’s lawyers and family to visit him. He suffered from gallstones and was not properly treated, and he suffered threats and intimidation from the guards. He spent nearly one year in jail and died eight days before his scheduled release. The cause of his death was not explained, but even the Presidential Human Rights Council concluded that Magnitsky probably died after a severe beating by guards.

The embittered Browder believes that the highest level of the Russian government is responsible for the scandal. In his view, obtaining such a large sum of money would not just take the compliance of mid-level officials. It would take the involvement of the most important officials in Russia, including heads of tax services, judges, prosecutors, police officers and, finally, politicians.

It is not clear whether Magnitsky and his client were entirely clean [within the confines of the law] from the beginning. This lack of certainty does not prevent Putin’s opponents from viewing Magnitsky as the guardian of the law and comparable to victims of other political killings, including the journalist Anna Politkovskaya and an insurgent Russian FSB [State Security organization] agent, Alexander Litvinenko.

For Putin critics, the curious posthumous process — possibly thanks to a breakneck justification of the Constitutional Court of Russia — is a symbol of the ongoing state disease: in this case, referring to the judicial authorities who have become part of the bribery machine. It also exemplifies that authority places primary importance on its own well-being rather than the good of the citizens.

Diplomatic Pingpong

The Magnitsky case casts a huge shadow over relations between Russia and the U.S.. In the upcoming weeks, it is likely to cool relations between the two countries to levels not seen since the end of the Cold War. By mid-April, the White House needs to declare a so-called Magnitsky list, which will include the names of officials involved in the investigation against and imprisonment of the lawyer, as well as names of officers violating human rights. Just like politicians from Belarus or Syria, they will be denied entrance to the U.S., and their accounts will not be supported by the U.S. banking system. This is the effect of the act signed in December by President Barack Obama and that was pushed in Congress by his former rival for the presidency, Sen. John McCain, R-Ariz., among others.

Obama’s signing of this law launched an exchange of retaliations. In December, Duma very quickly adopted the so-called Dima Yakovlev bill, which is a package of laws restricting the rights of U.S. citizens in Russia. Dima Yakovlev was a baby adopted by a family in Virginia. In July 2008 (in this region of the U.S. it tends to be unbearably hot), the adoptive father had forgotten about the child and, instead of taking him to the nursery, left him for nine hours in the car. Doctors did not manage to rescue the boy.

The new law, which Putin symbolically signed on an Orthodox Holy Innocents’ festival, included limiting the right of U.S. citizens to adopt Russian children; it also banned non-governmental organizations from receiving donations from U.S. citizens. The White House received a Citizen Petition, asking for Russian parliamentarians who raised their hands for the Dima Yakovlev law to be included in the Magnitsky list.

If this happens, as prominent figures of United Russia [the presidential party] seriously warn, Moscow will have no choice but to break diplomatic relations. To torment the holders of U.S. passports, Russian politicians suggested a few ideas that The Economist compared to the stigma of the “scarlet letter.” It aims particularly at preventing Americans from working in non-governmental organizations operating in Russia. This solution will be primarily targeted at Lyudmila Alexeyeva, the 85-year-old head of the Moscow Helsinki Watch Group, who has dual citizenship in Russia and the U.S. The ban on state television would also apply to foreign journalists who discredit the Russian state. This is an idea explicitly aimed at another well-known holder of U.S. citizenship, the regime television presenter Vladimir Posner, who has been in the Kremlin’s bad books in recent months.

In Russia there has also emerged an idea to exclude American athletes from next year’s Winter Olympics in Sochi. The silver-tongued — and, in these cases, reliable — populist Vladimir Zhirinovsky did not resist the opportunity to incite the situation, and demanded that “Americanisms” be deleted from the official Russian language. For example, “boutique” or “bar” would be replaced with words of pure Russian origin. In February, the hysteria was fueled by numerous reports of Russian children dying in the U.S. because of their adoptive parents’ negligence, which caused thousands of outraged people to take to the streets.

The Two Superpowers

According to Ariel Cohen, an expert on Russian affairs from the conservative and influential think tank Heritage Foundation, the anti-American attitude is one of the current pillars of Putin’s policies. The other pillars include, among others, supporting the Orthodox Church, reviving Russian patriotism, limiting foreign influence, and mitigating the views of proponents of a more democratic system in Russia. Conservative voters really like it, and their support of Putin keeps him in power.

The dispute with the U.S. also allows Putin to maintain the impression that Russia is a target of the superpower and, as such, is a superpower itself. In other words, Russia has shown the world and its citizens its real worth, not because of the agreements that expose its weaknesses, but through conflicts, measuring its rank by its rivals. This is just what North Korea and Iran do — they exaggeratedly challenge the U.S. because they want to fight in the top geopolitical division.

A year ago, when thousands of people demonstrated in protest against the exchange of positions between President Dmitry Medvedev and Prime Minister Putin, the latter explicitly said that the demonstrators were instructed by Western embassies. Among other things, he was referring to the numerous times that U.S. Ambassador Michael McFaul — who is under constant fire from the Russian government — met with the opposition.

McFaul is also one of the architects of the so-called “reset,” the symbolic partnership policy with Russia, which was initiated four years ago [March 2009] in Geneva by foreign ministers of the two countries, Hillary Clinton and Sergei Lavrov. The reset appealed to Russian diplomats because the U.S. relented; in Washington, Obama’s foreign policy critics call the reset “the doctrine of mea culpa.” The U.S. listened more to Russian expectations, hoping particularly for help transporting troops to Afghanistan and a willingness to reduce its nuclear arsenal — one of Obama’s great ideas — in exchange for waiving a missile shield project in Central Europe.

Now, even though McFaul assures that Russia and the U.S. are very close, the two countries have diametrically different views on how the most urgent global issues should be addressed, which include, above all, how to stop a civil war in Syria; more broadly, how to react to the Arab Spring, which greatly undermined Russia’s interests in the Middle East and North Africa; and finally, how to deal with Iran’s nuclear inclinations. In Moscow it is believed that the removal of the Ayatollah’s regime — through which Russia retains a monopoly on the supply of energy to many Eastern European countries — could pave the way of the U.S. to Central Asia’s natural gas and crude oil deposits.

It is necessary for Russia to deal with these issues; if they are not dealt with, the U.N. Security Council cannot introduce sanctions or give a green light for military intervention. It becomes increasingly evident that the reset may remain just an unrealized idea. The new era in relations with Russia started a few months after the war with Georgia in 2008. Since then, as the monthly Foreign Policy precisely calculated, Russia managed to help the Iranians build a nuclear reactor and has sold over $1 billion of military equipment to Bashar al-Assad since the beginning of the civil war in Syria, including helicopters indispensable for counterinsurgency operations. Putin described the U.S. as “a parasite” in the global economy, and his generals threatened that Central Europe could forget about the anti-shield project. And the Russian embargo on beef, pork and turkey from the U.S. still prevails. Officially, the ban on imports was introduced because meat from the U.S. could be dangerous for Russian consumers. However, examples from the past years — including the trials and tribulations with Polish meat or Finnish wood — show that, in the interpretation of security research on imported goods, politicians play a decisive role.

Politics aside, what do ordinary citizens make of the two countries? Americans have traditionally been uninterested in things outside the U.S., to the extent that, after several years of war there, they still find it difficult to locate Afghanistan on the world map. This was confirmed by a Gallup poll carried out last year: Only 2 percent of Americans consider Russia an enemy, in comparison to 1 percent of Americans who regard the federal government as the major threat. In contrast, Russians are not anti-American at all. As Deputy Head of the Duma Foreign Affairs Committee Vyacheslav Nikonov stated, a mere 18 percent have a negative attitude toward the U.S. (According to the Levada research center, 35 percent of Russians are unenthusiastic toward the U.S.) Another survey, however, shows that 86 percent of Russians either have never heard of the Magnitsky case or are unable to say what the trial was about really.