‘Kafkaesque’ Trial of Dead Hermitage Lawyer Starts in Moscow

January 28, 2013 JRL Russia List Assassinations, Beatings, Threats, Corruption, Law, Police, Courts, Crime, Economy, Business, Investment, Trade, Human Rights

Memorial Flowers and Photo of Sergei Magnitsky

(Bloomberg – bloomberg.com – Henry Meyer & Ilya Arkhipov – January 28, 2013)

A Moscow court opened the posthumous trial of Sergei Magnitsky, a lawyer for Hermitage Capital Management Ltd. who died in prison, in a case condemned by Amnesty International as “Kafkaesque.”

The state is appointing lawyers for Magnitsky and Hermitage head William Browder for the next hearing, set on Feb. 18, Alexandra Berezina, a spokeswoman for the Tverskoi District Court, said today. Judge Igor Alisov will decide whether the trial will be open to the public, she said.

Magnitsky’s mother Natalia is boycotting the proceedings and urged lawyers to refuse to act as court-appointed counsel.

Magnitsky died in November 2009 at the age of 37 while in pre-trial detention after alleging the biggest known tax fraud in Russia, a theft of $230 million from the national treasury. The case has sparked a diplomatic row, with the U.S. imposing sanctions on Russian officials accused of playing a role in Magnitsky’s death and Moscow retaliating by barring American citizens from adopting Russian orphans.

Prime Minister Dmitry Medvedev, who as president from 2008-2012 made the fight against corruption a priority, last week defended Magnitsky’s prosecution for tax evasion.

Magnitsky was “not a truth-seeker,” Medvedev said in an interview in Davos, Switzerland with Bloomberg Television on Jan. 23. “He was a corporate lawyer or accountant, and defended the interests of the people who hired him.”

Visa Bans

Browder is being tried in absentia on the same tax evasion charges as Magnitsky, and has denied any wrongdoing by either of them. He has lobbied for U.S. and European legislation targeting 60 Russian officials who he says are responsible for Magnitsky’s death with visa bans and asset freezes. Hermitage was once Russia’s biggest foreign equity investor.

The Prosecutor General’s Office said Nov. 29 that Browder and Magnitsky are accused of evading taxes of 522 million rubles ($17 million). Browder, a British citizen, is refusing to take part in the proceedings and the U.K. authorities aren’t cooperating in the case, the prosecutor’s office said.

Alisov and two prosecutors declined to comment on the hearings as they entered the courtroom today for a closed-door hearing.

The trial of Magnitsky is an “attempt to deflect the attention from those who committed the crimes he exposed,” Amnesty International said in a statement posted on its website on Jan. 24.

Rubber Batons

“The Russian authorities’ intention to proceed with the criminal prosecution of Sergei Magnitsky violates his fundamental rights even in death, in particular the right to defend himself in person,” John Dalhuisen, Europe and Central Asia director for the London-based human rights organization, said in the statement.

In 2011, a human rights council, under then-President Medvedev, called for officials to be prosecuted for Magnitsky’s death. The council said he was bludgeoned with rubber batons after being denied medical care during almost a year of pre- trial detention on trumped-up tax evasion charges.

The lack of a single conviction of officials implicated in the case is a symbol of the Russian government’s failure to tackle corruption, Christopher Granville, managing director of Trusted Sources, a London-based emerging-markets research group, said by phone on Jan. 9. The only official to face trial over Magnitsky’s death, a prison doctor, was acquitted in December.

Hermitage said it has traced $134 million through bank accounts and shell companies in at least 17 countries. Hermitage has accused government officials of stealing from taxpayers.

Russia kept its ranking as the most corrupt of any Group of 20 nation, according to Transparency International’s 2012 Corruption Perceptions Index published in December, placing it at 133rd out of 176 countries, below Uganda and Nicaragua.

“The Magnitsky case is a very emotional black mark against the Russian investment environment,” Roland Nash, chief investment strategist at Moscow-based Verno Capital, which manages about $200 million in Russian equities, said by phone on Jan. 17. “It harms sentiment.”