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Bill Browder on Putin, sanctions and how to end the war

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International sanctions imposed on Russian President Vladimir V. Putin have frozen his personal assets. Or, at least, the assets he seems to own.

More effective, perhaps, are the sanctions against Russian oligarchs in Mr. Putin’s orbit. It’s not necessarily because those well-connected globe-trotting billionaires might pressure the president to change course on the war in Ukraine. According to William F. Browder, this is because much of their wealth is held in Mr. Putin’s name.

Mr. Browder, once a major investor in Russia, has become one of the Kremlin’s biggest enemies. Russia has repeatedly tried to get Interpol to issue arrest warrants for him. And he’s such a thorn in Mr. Putin’s side that the Russian president referred to him by name during his first official summit with President Donald J. Trump.

What did he do to incur such anger? Mr. Browder ran one of Russia’s largest hedge funds in the late 1990s and early 2000s. But his public battles with corporate corruption ultimately led to his expulsion from Russia in 2005 as ” threat to national security”.

In 2009, his tax lawyer, Sergei Magnitsky, who was investigating government money laundering, was arrested and later died in a Moscow prison nearly a year later, aged 37. In 2012, Congress passed the Magnitsky Act, which punished Russians involved in the lawyer’s death with penalties. At Mr. Browder’s request, similar laws have been passed around the world.

This makes Mr. Browder very knowledgeable about the effects the sanctions are having on Russia’s political and business elite, including Mr. Putin. Now that world leaders are imposing a series of sanctions on Russia for its invasion of Ukraine, he brings a unique perspective on how these actions may influence Mr. Putin’s calculations.

Ahead of the release of his new book, “Freezing Order,” DealBook spoke with Mr. Browder about how to end the war in Ukraine, the influence wielded by the oligarchs and what really motivates Mr. Putin. The conversation has been edited and condensed.

What do you think is Mr. Putin’s endgame at this point?

Putin is a dictator. One of the great advantages of dictatorship is that he can steal as much money as he wants. And he chooses to steal a lot.

After a while, in a country where people think they are in a democracy, they begin to see that they are hungry and that they are not treated in hospitals and that their children do not go to school. They start to get angry, and they get angry at the manager. And so every once in a while, the manager has to do something to make people less mad at him.

The purpose of these wars is that he was afraid of being overthrown. And so the best way to do that is to get everyone to rally around the leader. And so when you talk about an endgame, there is no endgame. He’s just the one who stays in power.

As a longtime target of Mr. Putin – and someone who I imagine has been trying to better understand what motivates him – what do you think he is thinking?

The problem is that there are psychological characteristics that fuel all of this, which makes it a particularly toxic brew. The world he lives in is like a prison yard. It’s a world where everyone looks at each other aggressively and everyone has to be strong. You know, the most powerful person in a yard has to be the most vicious person to retain their power.

And so his idea was to just destroy Ukraine and then bang his chest and show everyone how powerful he is. But his misjudgment about the effectiveness of the Ukrainian response made him look stupid. And for a prison yard type person, that’s the worst thing that can happen.

Do you think he understands that?


Do you think everyone around him is a yes?

It’s not just the people around him. It is also the people of the West. The Ukrainians showed him a huge disrespect by successfully fighting back. So, for example, the war crimes that have been committed are not accidental. It’s part of his thing.

He has to show that he, his people and everyone around him is so vicious. They will keep escalating and upping the ante, and they don’t care what people think of them. In fact, they want people to think these bad things about them because it makes them more brutal.

Given what you’re saying, what’s a reasonable way to think about the endgame?

There’s no reasonable way for this thing to end. There is only one unreasonable way.

It’s either that he ends up taking over Ukraine and then heading to the Baltics to challenge us in NATO – or he’s defeated by Ukraine and the Russian people overthrow him because that he was the weak guy who couldn’t beat Ukraine.

How do you handicap these two options?

I think each of these options has a probability of 15%.

What is the remaining probability of 70%?

That he, the Ukrainians and all of us are stuck in this little bubbling. It’s not going to be on the same level of horror as it is right now, but in this simmering conflict that goes on and on for years.

Do you think the oligarchs really have an influence on him? Do you think punishing them was effective?

It’s like medicine for a certain type of disease. The medicine may have more effect depending on when you administer it. So if we had sanctioned the pre-invasion of the oligarchs and done it idly with our allies, it would have had a much greater effect on his actions than doing it now.

That’s not to say we shouldn’t do it now, but he was betting there wouldn’t be any serious penalties because he’s done a lot of terrible things over the past 20 years and there’s no hadn’t had any serious penalties before.

But does Mr. Putin care what the oligarchs think?

From him? No.

But it is extremely important that we sanction all the oligarchs for another reason than to hope that the oligarchs will overthrow him. The oligarchs are withholding his money. So when you see an oligarch who is worth $20 billion, $10 billion belongs to Putin. He cannot hold money in his own name.

So he has to give it to someone who actually has the financial means to act – to hold those funds. When we say we want to punish Putin, the only effective way to do that is to punish the oligarchs. And the reason is neither to change his mind nor to overthrow him by the oligarchs – it’s basically to prevent him from using that money to run this war in the future.

So it’s not that these oligarchs are calling him and saying, “You have to cut this”?

The oligarchs couldn’t do that. Any oligarch who did this would be immediately arrested, impoverished and killed.

What do you think American companies should be doing? What do you think of those who fear that if they leave they will never be able to come back?

First of all, continuing to do business in Russia after this invasion is equivalent to continuing to do business in Nazi Germany when Hitler began to persecute the Jews. It’s the same thing.

Every company has a moral obligation to leave Russia, whatever the cost. I don’t think anyone should even worry about coming back because everyone will be welcome in a post-Putin regime. And in a Putin diet, I don’t think anyone should even want to go back.

What about China? What influence does he have at this stage?

The only flaw in this whole thing is China, isn’t it? China has been very clear that it will not join the rest of the world in challenging or punishing Putin for what he is doing. I think China should be careful.

Why? Doesn’t China still have an influence on the West?

Well, the answer is that the United States will probably be less likely to sanction China before the consumers themselves sanction China.

So you think consumers are going to step in to punish China for supporting Russia?

I could easily imagine a movement where every American consumer looks at the label. Ultimately, consumers, whether or not they are organized by government, have as much power as governments, if not more.

Do you think Mr. Putin still has people following you?

The way Russia works is I don’t think he spends much time on me, but he gave the order 10 years ago to his government to pursue Bill Browder in any way possible. Until the order is overturned, there are people whose job it is to pursue me no matter what is happening in the world. And they keep chasing me.

What do you think? Will sanctions against oligarchs put pressure on Putin to end the war? Let us know:


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