Magnitsky and Russia’s Opportunity Cost


November 16th marks the one-year anniversary of the murder of Russian lawyer Sergei Magnitsky, who was imprisoned last year in Moscow under pre-trial detention and intentionally denied medical care which led to his death. The responsibility lies with the Russian government, and specifically with individual officials who sought to cover up a $230 million tax fraud they had orchestrated using stolen documentation from Magnitsky’s client, Hermitage Capital Management.

No one has ever been held accountable for Magnitsky’s death: no charges, no arrests, no trials, and no justice, despite the mountains of evidence and even the names of the “untouchables” made public. Instead, with a familiar Russian twist, the killers were rewarded with promotions and decorations, while the victim has been blamed for the crime. Those who make a fuss over the Magnitsky incident are investigated, persecuted, and sometimes chased into exile.

“Sergei Magnitsky reported a crime committed by police officers,” William Browder told The New York Times. “They then arrested him, tortured him and killed him. Now, one year later, they are accusing him of the crime that they committed. There is a special place in hell for people like this.”

So why, after a full year of this embarrassing and entirely avoidable farce, does the Russian leadership still see no incentive to change the situation? It seems hard to imagine that relatively low-level officers like Lt. Col. Artem Kuznetsov or Maj. Pavel Karpov of the Interior Ministry could be so incredibly valuable to the Kremlin that their protection should be worth such a high cost. In fact, it would be extraordinarily easy for the leadership to make an example with a symbolic prosecution, and begin implementing even the most modest legal reforms as a gesture of goodwill.

Instead there is an active resistance from the Kremlin to any change to the status quo. This pattern of unwillingness is meaningful, denoting a certain level of political investment in legal nihilism, despite the extraordinary economic damage it causes. The power structure surrounding Prime Minister Vladimir Putin faces an opportunity cost with regard to legal reform, seeing greater incentives in maintaining a system of cronyism and political arbitrage rather than creating accountability before law and judicial independence.

This choice seems evident in a number of extra steps taken against victims, which not only add insult to injury, but also serve to communicate the indiscriminate threat of state power.

When journalist Anna Politkovskaya was killed, Putin didn’t even acknowledge the event for a week, and only then disparaged her work as insignificant. Later friends of the government would suggest that forces of the opposition likely ordered her murder, looking to give the state a bad name. When Alexander Litvinenko was murdered by polonium poisoning, the lead suspect enjoys a Duma seat as a celebrity while the government argues that Litvinenko probably poisoned himself. When Mikhail Khodorkovsky wouldn’t go down, they attacked all his lawyers to try to flip witnesses, including Vasily Alexanyan, who was imprisoned, contracted HIV and tuberculosis, and was then denied medication.

Similar fallout has occurred following the most recent near-fatal attack on the journalist Oleg Kashin and other violence against journalists. A Nashi leader attacked his reputation as a reporter, and then suggested that journalists should stop writing things that provoke these attacks and murders. Anatoly Adamchuk, another journalist who suffered an attack on the same day, was accused by the police of beating himself up. Although journalist Mikhail Beketov was brutally attacked back in 2008, he went on trial this month as a defendant in a defamation case. Naturally, he lost. The examples go on and on.

In preparation for Magnitsky’s anniversary, fresh efforts are underway to drag his name through the mud. The Interior Ministry has dug up a new fake witness, who, like the convicted murderer Viktor Markelov, had also been appointed after Hermitage had lost control of the subsidiary companies. While blaming a dead man and rewarding his killers, “Russian authorities figuratively spit on his grave,” writes David J. Kramer.

In an even more bizarre twist, Moscow’s notorious Butyrka prison, where Magnitsky lived his final days, announced last week that they will be installing tanning beds and wireless internet in order to improve conditions for inmates. This really seems like quite the cruel joke timed for the anniversary, as the inmates don’t even have access to hot water for basic hygiene.

Lawlessness has been working out pretty well for Putin – when courts don’t work, and when the investigators are specialized in inventing cases rather than solving crimes, the Kremlin becomes the ultimate arbiter in the system. This fragile and desperate power is threatened by perceptions of clemency, and eagerly exploited by the corrupt. It’s a machine that requires a constant flow of victims, and one that must be protected from reforms that may pry it away from its dependence on the state.

In the long run, rule by fear always loses out to rule of law. As the greater the level of instability becomes visible, the more Putin’s stakeholders are going to have to review the incentives of building these independent institutions vs. the benefits of maintaining a broken down fiefdom of unitary power.