The House passed a bill today that could either drastically improve or worsen US-Russian relations.
It all depends on how Russia responds to a human rights bill, the Magnitsky Act, included in a bill to end Cold War-era restrictions on Russian trade.
The administration and economists have predicted that US exports of goods and services, currently at $11 billion, could double in five years if trade relations were normalized, the AP reports. But the Magnitsky act, which imposes restrictions on Russian officials involved in human rights violations, could cause severe retaliation.
To understand the Magnitsky Act, you have to go back to 2009, and the death of its namesake, Moscow lawyer Sergei Magnitksy. While the case of Pussy Riot may have grabbed more headlines, it is the Magnitsky’s sad case that may have more real impact inside and outside Russia.
Moscow-based civil-law lawyer Magnitsky had been working for Hermitage Capital, a fund managed by American Bill Browder. After Browder was refused entry to Moscow in 2005 and Hermitage’s offices were raided in 2007, Magnitsky began investigating.
Magnitsky later testified that he had uncovered a huge scam by top police officials to embezzle $230 million in taxes, from money that Hermitage Fund companies had paid in 2006. Magnitsky alleged that the corrupt cops had used corporate seals and documents seized in a June 2007 raid on Hermitage’s Moscow office and set fake companies under the same names, which then received a full tax rebate.
When the lawyer appeared in front of the State Investigative Committee in 2008, he named a number of police officers he believed were involved in this scam. Russia’s Interior Ministry, perhaps not coincidentally, assigned these same officers to investigate. In November 2008, Magnitsky himself was charged with tax evasion and taken to prison.
Here’s where the story gets even darker. Magnitsky, being kept in Moscow’s notorious pre-trial prisons, unexpectedly died in November 2009. His death was originally attributed to a rupture to the abdominal membrane before officials changed that to a heart attack.
While an official investigation into his death in 2009 yielded little results, last year a new report, supported by Russia’s Presidential human rights council, found that police torture appeared to have contributed to Magnitsky’s death. Council member and human rights defender Valery Borshchyov told Interfax, “It turns out that 8 prison employees were beating one prisoner.”
Most now agree that, at the very least, squalid conditions and inadequate medical care played a big role in his death. Despite this, there has been little reprieve for Magnitsky or his family. While a number of prison officials were fired, the tax case against Magnitsky was reopened in February 2012 — even though the defendant is dead.
Since his death, Magnitsky has become an international cause célèbre. This is largely thanks to the extensive efforts of Hermitage boss Browder, who has relentlessly campaigned and investigated the death.
“What Hermitage Capital has discovered is that the entire apparatus of the government and the law enforcement system in Russia is circling the wagons in order to protect a number of officials involved in Sergei Magnitsky’s false arrest, torture and death,” Browder told Business Insider in an interview earlier this year. “The way in which they’re doing that is by exonerating the guilty officials and then attacking the Innocent victim, and in this case the victim is dead.” Browder told us he believed the scandal went all the way to the top of the Russian government.
Russian opposition to the Magnitsky Act — which would impose visa restrictions and financial penalties on 60 Russians allegedly involved in Magnitsky’s imprisonment and death, as well as any official responsible for persecuting those promoting human rights and freedoms — has been remarkably strong, with Russia creating its own list of 11 US officials (most involved with Guantánamo Bay) and placed restrictions on them.
While few could deny that the Magnitsky case is especially horrifying, many also fear that relations between the two countries could return to Cold War-style black lists if the Magnitsky Act is passed. Officially, the Obama administration had hoped that the trade bill is passed alone today.
Regardless, the bill in the House by a 365-43 vote, and now goes to the Senate. Russia’s Ministry of Foreign Affairs has issued a statement saying the bill’s passage was “defiantly an unfriendly and provocative attack”.
Business Insider Emails & Alerts
Site highlights each day to your inbox.