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The mild mannered lawyer died more than two years ago.
MOSCOW — Few things illuminate the dark underbelly of Vladimir Putin's Russia more starkly than the fact that a man who is among the most furiously denounced by the regime, and harshly prosecuted by law enforcement, is a mild-mannered corporate lawyer who's been dead for more than two years.
The case of Sergei Magnitsky — who uncovered what might well be the crime of the century and then made the mistake of testifying about it — has grown into a huge international scandal ever since he died, under highly suspicious circumstances, in a police holding cell in November 2009.
The story of how Magnitsky exposed a vast corruption ring at the highest official levels, and then was allegedly framed, tortured and murdered, has been well documented. It is detailed in reports by Moscow's independent prison watchdog, the Kremlin's in-house human rights commission, as well as a 75-page investigation commissioned by his employer, Hermitage Capital, a London-based asset management firm founded in 1996 that remains one of the largest foreign investors in Russia.
In late January, the Harvard and Columbia business schools released what may be the definitive study of the case, which is likely to push the international outrage factor up several notches.
Largely due to the efforts of Bill Browder, Hermitage's founder who has lived in London since being denied re-entry to Russia six years ago, lawmakers in the United States, Canada and at least five European Union countries are mulling legislation that would bar a list of 60 top Russian officials allegedly involved in the case from traveling, buying property or banking in those countries. The US has already imposed visa restrictions and other penalties. Russia’s foreign minister Sergei Lavrov and chief prosecutor Yury Chaika have denounced these sanctions as "unacceptable" pressure on Russia's legal system, which could possibly undermine the delicate Obama-era "reset" of relations between Moscow and Washington.
None of the officials implicated in Magnitsky's fate have been punished. Most have been exonerated. Some have been promoted or decorated with high state awards.
Last October, vengeful Russian police opened up an unprecedented posthumous investigation of Magnitsky. Critics say the move was mainly aimed at intimidating his family and supporters, and stifling any further revelations about the abuse of private business by predatory state officials.
Last week, Russian prosecutors declared the investigation complete and said they will soon take the case against Magnitsky to court, in what experts say will be the first public trial of a dead person in Russian history. Browder will also be tried, in absentia.
"They are trying very hard to prove Magnitsky's guilt, even from beyond the grave, as a signal to all corrupt judges and cops that they can feel safe in what they're doing," says Yana Yakovleva, chair of the Business Solidarity Foundation, a Moscow-based lobbying group.
"In this country the state considers the pockets of private business to be its own pockets, to be tapped however it likes. When I say 'state,' I don't mean a law-governed machine but rather what we have here in Russia: groups of state officials who are supposedly in public service, but who actually use their positions for self-enrichment. You can hardly call it a state."
A brazen scam
As a lawyer working for Hermitage, Magnitsky discovered what he later testified to be a vast scam on the part of top Russian officials to embezzle $230 million that the Hermitage Fund's various companies had paid in taxes to the Russian state treasury in 2006.
According to statements he made at two sessions of the Russian State Investigation Committee, the operation began with a June 2007 police raid on Hermitage's Moscow headquarters, in which the corporate charters, official seals and other basic documents of several Hermitage-linked companies were seized.
The conspirators used those documents to secretly re-register the same companies with the Russian government under the names of "new management." They applied for a full tax rebate — more than a quarter billion dollars — which was granted in a single day and sent directly to private accounts opened up by the plotters.
"This story is just the tip of a vast iceberg of corruption and criminality in the Russian government," said Browder, who recently returned to