Millionaire Tries to Stop Documentary Claiming to Tell the True Story of Russia’s Missing $230 Million

A hedge fund manager’s reputation, U.S. sanctions targeting human rights violations in Russia, and the truth about how Sergei Magnitsky, a tax lawyer caught up in a $230 million dispute, wound up dead. So the story goes in Andrei Nekrasov’s new documentary, “The Magnitsky Act” — a film that’s been pulled thrice by European theaters and broadcasters who bent to legal pressure from the man it seeks to expose as a fraud.

Next Monday, the Russian-born Nekrasov will finally get his chance to premiere it at the Newseum, a journalism history museum in Washington. Nekrasov is showing it to a private audience whose invitees include congressional staffers, State Department employees, members of the White House National Security Council, and journalists. Investigative reporter Seymour Hersh will moderate the screening.

The film centers on Sergei Magnitsky, who human rights activists believe was murdered in 2009 after accusing the Russian police of stealing an estimated $230 million from the state treasury.

But according to Nekrasov, that narrative is wrong. By his telling, Russian authorities were the victims of a massive theft, not the perpetrators. The film, he told Foreign Policy in a telephone interview, provides strong circumstantial evidence that Magnitsky’s boss, Bill Browder, was possibly involved in the multimillion dollar theft from Russian taxpayers.

Sonya Gavankar, the Newseum’s manager of public relations, told FP in an email that the museum would screen the film despite a letter from Browder’s lawyers demanding that it be cancelled.

Browder was one of the first Westerners to cash in on the fall of communism in Russia, starting Hermitage Capital Management in 1996 with just $25 million in seed capital. Within a few years, he became the largest investor in Russia, at one point managing $4.5 billion in capital, and staying on Moscow’s good side by vocally supporting Russian President Vladimir Putin.

His riches-to-super-riches story came to an abrupt end, however, in November 2005, when Russia blacklisted Browder as a threat to national security for auditing the companies he invested in and leaking details of insider trading and corruption to the press. A year-and-a-half later, police officers raided his firm’s office in Moscow and confiscated paperwork.

Here’s where the accounts diverge: Browder says the police then stole three of his holding companies and used them to claim a $230 million tax rebate; Nekrasov, who previously directed films critical of the Kremlin, argues that authorities were investigating Hermitage Capital over legitimate concerns about large-scale tax evasion.

“I can prove in court that Browder is not telling the truth,” Nekrasov told FP in an interview from Berlin.

His accusation, stunning if true, has alienated friends, enraged Browder, and threatens to tarnish the director’s well-respected career.

It would also undermine the narrative behind the Magnitsky Act, a U.S. law passed in 2012 to punish those responsible for the tax lawyer’s arrest, torture, and death in custody. It allows the United States to withhold visas and freeze financial assets of Russian officials involved Magnitsky’s death and other human rights abuses. In retaliation, Moscow banned U.S. adoptions of Russian babies.

Nekrasov told FP he set out to make a film based on Browder’s story that would be “a docu-drama praising Magnitsky.” Instead, he says close to two years of research led him to conclude that the conventional narrative was false. He said funding for the film came exclusively from mainstream western European organizations.

Nekrasov’s film documents how he went from trusting Browder’s word to disbelieving it. The director says he began to doubt the hedge fund manager after reading the actual police reports in Russian. For example, Nekrasov argues that Magnitsky’s first contact with the police was not a voluntary act of whistleblowing, as Browder maintains, but a record of the police questioning him as a key witness in a tax evasion investigation.

Among Russian activists, Nekrasov said, Magnitsky is seen as a hero and Browder as truthsayer. Any revelation that sullies them could be a bitter pill to swallow.

“The worst criticism comes from my Russian friends,” he said. “Most of my friends are completely pro-Browder, and Putin doesn’t have any influence over them. I became like a traitor.”

Browder has thwarted Nekrasov’s previous attempts to show the film with threats of legal action. The first time, he intervened at the last minute to stop Nekrasov, with Blu-ray disc in hand, from showing it to an audience of European Union parliamentarians at the their headquarters in Brussels.

Around the time of that planned screening, Magnitsky’s mother and widow denounced Nekrasov’s film in a joint letter to the European Parliament. Browder’s lawyers also have sent letters threatening to sue the producers and venues that have tried to screen the film, according to Nekrasov.

In a phone call with FP, Browder said he would pursue legal action against the Newseum if he perceived it as backing the movie “in any way.”

“They’re on record now for knowing the libel,” he said, referring to a list of supporting evidence he gave to the Newseum.

“We’ve explained to them that this movie is a fraud and that it contains false information, so if they continue to support it then they’re disseminating this false narrative,” Browder said. “They have a choice. They can stop it.”

Magnitsky’s widow and mother have asked the Newseum to shut down the program. On Thursday, they sent a letter to the board of trustees urging them to “stop an evil and vindictive attack on our deceased husband and son.”

Browder and Magnitsky’s family believe that a Russian implicated in the tax fraud is funding the screening at the Newseum.

Browder said he has evidence that Denis Katsyv, a Russian national under investigation by the U.S. Justice Department for taking some of the $230 million, is funding the Potomac Square Group to rent out the room at the Newseum. The Potomac Square Group, a public relations firm in Washington, is also representing Nekrasov.

“This has nothing to do with free speech. It has to do with laying out false information by alleged Russian gangsters who are currently under investigation and being sued by Department of Justice,” Browder said.

In an email to FP, Christopher Cooper, a partner at the Potomac Square Group, denied Browder’s allegation that he was representing Katsyv’s company.

Nekrasov also denied knowledge of this arrangement and said he’d “be very curious to see what this evidence is,” though he did admit to knowing Katsyv.

Nekrasov told FP that his experience dealing with Browder “has been a bit depressing, to be frank.”

“What I discovered is how easy it is — if you have a lot of money — to basically gag somebody,” Nekrasov said.

Photo credit: FRED HAYES/Getty Images