Russia 110214 Basic Political Developments

We are not safe doing business in Russia

http://www.telegraph.co.uk/news/worldnews/europe/russia/8322514/We-are-not-safe-doing-business-in-Russia.html

Employees are in constant danger of being harassed, arrested and killed, writes William Browder.

By William Browder 7:21AM GMT 14 Feb 2011

Today, Sergei Lavrov, the Russian foreign minister, arrives in London to meet leading British politicians and officials in a bid to revive bilateral relations, increase business ties and attract UK investors to Russia. Doubtless, there will be a good deal of talk about modernising the Russian economy and extolling the virtues of investing in it. Reference will be made to large investments made by BP, Pepsico and other multi-nationals as evidence of the "improving investment climate".

But before anyone takes these representations at face value, they should hear my story.

For 10 years, I was the largest foreign portfolio investor in Russia, with 6,000 investors from 30 countries totalling $4.5 billion

(£2.8 billion) under management. Our investment strategy in Russia was to improve rights of minority shareholders, promote good corporate governance and expose corruption.

The trouble began after my fund launched a campaign to clean up the multi-billion dollar corporate malfeasance taking place in the Russian state-owned gas monopoly Gazprom, and in Surgutneftegaz. After we named names and exposed the details of several enormous corruption schemes, the Russian foreign ministry declared that I was a "threat to national security". On November 13, 2005, I was deported and barred from re-entering the country.

My deportation was the beginning of an unimaginable nightmare. On June 4, 2007, the Russian police raided my offices in Moscow, seizing documents which were then used by Russian officials to expropriate our investment holding companies, forge billions of dollars of fake liabilities and embezzle taxes that we had paid to the Russian government the previous year. Incredibly, officials then approved – overnight – the largest fraudulent tax refund in Russian history, amounting to US$230 million. This was paid out two days later to a group of criminals working hand in hand with corrupt officials. Meanwhile, my employees and I received anonymous death threats.

So we hired a young Russian lawyer named Sergei Magnitsky to investigate. Working with lawyers and forensic investigators, he pieced together evidence of the criminal conspiracy and testified on the record against senior police officials, judges and criminals involved. Sergei was then arrested by the same police officers he had provided evidence against, locked away without bail or trial and shuffled between increasingly harsher detention centres for a year in an effort to get him to change his testimony. He was denied medical care and family visits, and tortured. After 358 days in detention, he was found dead. The Wall Street Journal described his death as a "slow assassination".

What happened to Sergei was not a one-off. Neither is what happened to me, nor to many others. Mikhail Khodorkovsky is set to spend 14 years in a Siberian jail after his former company Yukos Oil was expropriated by the Kremlin following trumped-up charges. In 2006, Shell was forced to sell 50 per cent plus one share of its lucrative Sakhalin Island project under threat of serious criminal charges. BP was hit with a £148 million tax bill as well as having 148 employees expelled from the country. Telenor, Ikea, NewsCorp, Motorola and Nestle have endured similar illegal sanctions by the Russians.

It is a fact that there is no safety for people working in Russia and no protection of property rights. Local journalists have been attacked and killed in broad daylight, human rights activists and intellectuals are silenced, opposition leaders are detained, business competitors and professionals are wrongly accused and prosecuted, and foreign whistleblowers or international journalists are deported.

In today's Russia, British citizens are not safe to invest or do business. In fact, the more successful you are, the more likely you are to be targeted by the corrupt regime. Nor does it stop at money and assets, but extends to the horror of divided families, and physical violence. Turning a blind eye to this reality is not the answer.

It is time for the British Government to look after the interests of its people in its dealings with Russia. Just as the Foreign Office routinely issues warnings against visiting countries where the life and liberty of British citizens will be threatened, it has a duty to issue "business warnings" as well. The Government should advise companies against doing business in countries that do not promote a safe investment environment or guarantee the rule of law and safety of citizens. Russia is a country in which British companies are in constant danger of having their assets expropriated and their employees harassed, arrested and killed.

There are many attractive countries for British business to invest in – but Russia is not one of them. It's time to make that clear.

William Browder is the founder of Hermitage Capital Management.

Russian diplomats win in friendly football match

http://english.ruvr.ru/2011/02/13/44213323.html

Feb 13, 2011 23:19 Moscow Time

Russian diplomats have beaten their English counterparts with a score of 6:4 in a friendly football match, which took place in London on Sunday.

Rooting for the Russians was the new Ambassador of the Russian Federation Alexander Yakovenko.

The match was held on the eve of a visit to London by Russian Foreign Minister Sergei Lavrov.

MP's Russian assistant accused of spying offered Kremlin TV role

http://www.telegraph.co.uk/news/worldnews/europe/russia/8321446/MPs-Russian-assistant-accused-of-spying-offered-Kremlin-TV-role.html

An MP's assistant accused of spying for Russia is on course to follow in the footsteps of Anna Chapman after being offered a job at the Kremlin's English-language TV news propaganda channel.

By Andrew Osborn, Moscow 3:56PM GMT 13 Feb 2011

Katia Zatuliveter, a 25-year-old former parliamentary assistant for Mike Hancock, a Liberal Democrat MP, was arrested in December and ordered deported on MI5's advice after it was decided that her continued presence in Britain was a potential threat to national security.

She has since been released on bail and is living in London, with strict limits on her freedom of movement, until her appeal against her deportation can be heard in October.

However RT, the Kremlin's English-language TV news channel, has offered her an unspecified on-air role which could see her become a presenter in Moscow or even a London-based reporter.

"We are interested in working with Katia and she knows about it. I cannot say anything more now," Margarita Simonyan, RT's editor-in-chief, told Russian media. "We will only be able to give more detailed information once talks have been concluded with Ekaterina (Katia) herself."

The channel, which changed its original name, Russia Today, to RT, in order to try to appear more objective has a habit of slavishly following the Kremlin's preferred newsline on any given story, of pumping out lurid anti-American conspiracy theories, and of broadcasting sugary interviews with Kremlin insiders who do not do Western media.

If Miss Zatuliveter accepts the job offer it would not be the first time an alleged Russian spy whose cover has been blown had been rewarded with a TV job. Anna Chapman, the glamorous 28-year-old Russian spy deported from the United States last summer, has since carved out a career for herself as a TV presenter on a show of her own called "Secrets of the World with Anna Chapman."

Miss Zatuliveter, who last week had her bail conditions eased so that she could negotiate with RT, has insisted she is not a Russian spy though security service sources have said there is no doubt she was working for the Kremlin as a "sleeper agent," either for its SVR foreign intelligence service or for its GRU military intelligence arm.