Russia opens trial against dead lawyer Magnitsky

By bne IntelliNews February 18, 2013

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The posthumous corruption trial of Sergei Magnitsky, the lawyer who died in pre-trial detention in 2009, opened on February 18 in Russia's most controversial business prosecution since the jailing of oil tycoon Mikhail Khodorkovsky.

Magnitsky is accused of abusing tax incentives to help investment fund Hermitage Capital avoid paying taxes in 2001, the charge over which he was jailed in 2008. In his defence, the lawyer accused several high-ranking police officials of perpetrating the tax fraud, which cost the Russian state $230m. He died in prison after a year in which he refused to recant his claim.

International condemnation has followed, driven by Hermitage Capital head Bill Browder, helping shape a sharp deterioration in relations with the US, which passed the "Magnitsky law" last year. The bill bans Russian officials allegedly implicated in human rights abuses from entering the US, and in theory allows the government to seize their assets in retribution.

The legislation enraged the Kremlin, which calls it unwarranted interference in Russia's internal affairs. Moscow quickly countered with an equally controversial (and domestically unpopular) ban on US adoption of Russian orphans.

Browder, once the biggest portfolio investor into Russia and a one-time Kremlin champion to foreign investors, has turned on Russia since his visa was pulled in 2006, closely followed by the accusations of tax fraud. Browder has convincingly argued in a series of videos called "The Russian Untouchables" that it was actually Russian tax officials and police that defrauded the state, and insisting that Magnitsky's death was as a result of attempts to cover this up.

Browder insists that the case, the first time a dead man has been put on trial in Russian or Soviet history, is a continuation of the Kremlin's rage over the Magnitsky bill - for which he lobbied tirelessly in Washington - and an attempt to sully the lawyer's name in response. Russian law does allow for dead people to be brought to trial, but it has usually been used to rehabilitate victims Soviet excesses such as Stalin's purges, and only at the request of the family.

On the flip side, the Kremlin claim that the US has no business passing laws concerning Russian legal judgments is a strong argument. Moreover, in principle this law could be applied to any country that abuses human rights, including the likes of US ally Uzbekistan. However, thus far it has been exclusively applied to Russia.

Still, the Kremlin has not been totally impassive to the tragedy. Prime Minister Dmitry Medvedev ordered a criminal investigation into the case while he was still president, and two officials are currently on trial over Magnitsky's death. Several other officials were sacked. At the same time, while the case against the deceased lawyer is clearly a farce, the Kremlin is determined to see it through.

More generally the case is another signpost on the diverging paths of Russia and the West. Both Russian President Vladimir Putin and Medvedev repeatedly said in the last decade that they are willing to work more closely with their "natural allies," but the West had to meet a resurgent Russia half way. However, the olive branches Moscow has offered have been rebuffed, while the Kremlin has proven itself totally inept at diplomacy. As of November's ASEAN (Association of Southeast Asian Nations) summit, Russia seems to have abandoned all semblance of trying to make nice with Washington or Brussels, turning the main thrust of its foreign policy eastwards, and especially targeting China.

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