Russia's former largest foreign investor: 'Power is very simple in Russia'

Bill BrowderCNN/screenshotBill Browder on CNN

Hedge fund manager William “Bill” Browder, once the largest foreign investor in Russia, sat down with Fareed Zakaria of CNN to provide a unique perspective on power and Vladimir Putin’s Kremlin.

“The power is very simple in Russia — whoever has the power to arrest people is the person in power,” Browder said. “And so what Putin does is he has a bunch of guys around him who have the power to arrest people.

“And so it doesn’t matter how rich you are, if you can be arrested, put in jail and have your money taken away, the guy who can do that to you is the most powerful person in Russia.”

Putin, a former KGB lieutenant colonel, became Russian prime minister in August 1999 and president in May 2000. He then initiated a crackdown on some of Russia’s wealthiest businessmen — including kingmaker Boris Berezovsky and oil tycoon Mikhail Khodorkovsky — to consolidate control over the economy and the government.

Browder explains that Putin “arrested the richest oligarch in the country [Khodorkovsky in 2003], then said to the other guys, if you don’t want to be arrested, you need to share your money.”

Browder started successfully investing in Russia in 1996 and began making money by exposing corrupt oligarchs. He told Zakaria that “for about four years, this naming and shaming of Russian companies actually worked, because my interests coincided with Putin’s.”

In 2005, however, Browder was stopped at the VIP area of Moscow’s Sheremetyevo airport in November 2005, barred from entering the country, “blacklisted,” and named a “threat to national security” after he accused Russian tax officials of corruption and embezzlement.

“What I didn’t realise then, and it’s become absolutely plain and obvious to me now, based on my experience, is that Putin wasn’t above it all, Putin was intimately involved in it all, and it wasn’t like he was restraining the oligarchs — he was the biggest oligarch,” Broder said. “And everything that he’s done since then has come to prove that.”

PutinREUTERS/Alexei Nikolskiy/RIA Novosti/KremlinPutin at the Novo-Ogaryovo state residence outside Moscow March 4, 2014.

Browder’s friend and tax attorney Sergei Magnitsky had discovered that Moscow tax officials embezzled $US230 million.

Sergei Magnitsky Wikimedia CommonsSergei Magnitsky

The same officials Magnitsky testified against retaliated and arrested him on charges of tax evasion. He was placed in pretrial detention for 11 months. There, Browder writes, the 37-year-old married father of two was beaten to death at the hands of Russian authorities. He never said goodbye to his family.

“I would never have gone to Russia in the first place; I would gladly trade all of my business success for Sergei’s life,” Browder wrote in his newly released book, “Red Notice: A True Story Of High Finance, Murder, And One Man’s Fight For Justice.”

Over the past eight years, Browder, the founder of Hermitage Capital Management, has made fighting corrupt Russians his life’s work after the killing of Magnitsky.

Julia La Roche contributed to this report.

Check out Browder’s full interview at CNN >

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