Bolster the US judiciary’s defense against Putin’s kleptocracy
United States citizens are outraged about the Kremlin’s incursion into the U.S. electoral system, but that is unfortunately just the tip of the iceberg. Russia is also trying to hijack the U.S. judiciary for corrupt purposes, expropriation and political repression, which has received little attention.
Unlawful seizure of private assets and private companies by the Kremlin has been the norm since Vladimir Putin became president in 2000. Russia’s law enforcement agencies and courts are regularly used for the enrichment of the ruling elite.
The Sergei Magnitsky case is the best-known example of the Russian state’s co-opting of the courts to support its kleptocracy. A cabal of Russian tax and law enforcement officers conspired to defraud Russian taxpayers of $230 million, the largest tax fraud in Russian history, by targeting Bill Browder’s company, Hermitage Capital.
When Magnitsky, Browder’s tax attorney, discovered the fraud and notified authorities, Hermitage and Magnitsky were charged with their own fraud. Magnitsky was then arrested and died in pre-trial detention at the age of 37.
Since then, Russian authorities have repeatedly called on Interpol to disseminate red notices to harass Browder and other victims. Interpol, which is meant to facilitate cross-border coordination among law enforcement agencies, is susceptible to abuse as it passes on requests and notices from states without much scrutiny.
Russia misuses Interpol’s red notices to gain the support of international law enforcement agencies, including U.S. law enforcement, in pursuing political dissidents and victims of corporate raiding.
Russian legal authorities also abuse the U.S. court system by exploiting U.S. federal discovery laws. Under these laws, a foreign party can use the U.S. federal courts to compel discovery from any person under U.S. jurisdiction.
The Russian authorities used this law repeatedly against Yukos and its affiliates, after confiscating the oil giant from Mikhail Khodorkovsky and other shareholders.
More recently, agents of the Russian state have engaged in two federal court cases in New York: a 2016 attempt to loot the assets of Janna Bullock and her real estate investment firm RIGroup, and a 2018 effort to plunder the personal property of banker Sergei Leontiev, a former shareholder of Probusinessbank.
The Russian state is using the discovery process to extract information to further criminal charges and extortion schemes against individuals who fled to the U.S. seeking the protection, safety and rule of law now being undermined.
The Russian government and its associates have developed similar strategies to use federal and state courts to recognize and validate bogus decisions from Russian courts, exploit the U.S. Bankruptcy Code on behalf of sham creditors aligned with the Russian state and enforce illegitimate claims and orders issued by corrupt Russian judges.
Although U.S. judges are permitted to consider evidence questioning the legitimacy of a foreign judicial decision, they are rightly hesitant to speculate on whether another country upholds the rule of law.
Such a determination requires significant analysis beyond the scope and ability of most courts and therefore leaves the U.S. judiciary ill-equipped to defend itself against Russian incursion.
The U.S. is slowly beginning to fight back against Russian intrusion into our courts. In 2017, the United States sanctioned two Russian private-sector lawyers, Yulia Mayorova and Andrei Pavlov, who repeatedly represented Russian government agencies in the United States.
After passage by Congress of the “Global Magnitsky Human Rights Accountability Act,” the U.S. sanctioned Artem Chaika, the son of Russia’s prosecutor general, who used his father’s position to extort bribes and win contracts for himself and his cronies, while driving out competition.
More needs to be done to keep Russian lawlessness abroad at bay. The House and Senate judiciary committees should investigate the hacking of U.S. courts and hold hearings to examine the threat they pose, with an eye toward developing legislation that will help block future attacks.
The Department of Justice and the State Department should consider establishing a joint task force to coordinate with U.S. courts, where victims of abuse by corrupt governments could submit their evidence.
The State Department already produces annual reports that opine on the state of foreign judiciaries, which can be put to good use to protect the integrity of U.S. courts.
Anders Aslund is a senior fellow at the Atlantic Council, where he specializes on economic policy in Russia, Ukraine and East Europe. He is currently writing a book on Russian crony capitalism.