Business Week reports:
Now it is the Russian lawyers’ turn.
Scores of journalists and businessmen have suffered beatings, harassment, and even assassination in Russia’s sometimes anarchic society. With the brazen daytime murder of human rights attorney Stanislav Markelov on Jan. 19, it became clear that members of the Russian bar are also targets in the murky vendettas that taint commerce and politics in Moscow and throughout the country.
It is not just lawyers alleging human rights abuses who are vulnerable. Corporate lawyers, too, face increasing threats. “It is now impossible in Russia to defend a client who is in a politically motivated case or in a [commercial] case where the other side has a lot of money and is willing to play dirty,” says Jamison R. Firestone, managing partner of Firestone Duncan, an American corporate law firm in Moscow. “At worst, you will end up in prison, in exile, or dead,” he adds.
Consider the fate of Sergei Magnitsky, a tax and accounting lawyer working for Firestone Duncan. Magnitsky was arrested in November and is in detention awaiting trial for tax fraud, relating to advice he gave in 2001 to Hermitage Capital Management, a British fund that was once the largest portfolio investor in Russia. Jamison Firestone argues that the case against Magnitsky is entirely fabricated and intended as a form of pressure on Magnitsky’s client, Hermitage Capital, by hostile forces within the Russian state, possibly in collusion with corporate raiders.
In recent years, according to Firestone, Hermitage has hired three law firms in Russia, none of which previously had any connection to each other. But in an apparently coordinated crackdown, lawyers at all three firms are now subject to criminal investigations. That followed several raids on the firms’ offices by Russian police last year. The International Bar Assn., based in London, denounced the raids as “another sign of deterioration of the rule of law in Russia.”
The crackdown comes just months after Hermitage’s trustee, British bank HSBC (HBC), lodged a formal complaint with the Russian government. HSBC alleged a large-scale fraud involving members of the Russian Interior Ministry. The complicated case relates to three Hermitage subsidiaries in Russia that were improperly reregistered under new owners in 2007. The firms were then allegedly used to steal $230 million from the Russian treasury. Although the theft of the three companies has since been established in the Russian courts, the lawyers who filed the complaint have fled the country, fearing arrest, according to attorneys familiar with the situation.
Among those who have left Russia is Eduard Khairetdinov, a lawyer hired in late 2007 to represent both Hermitage and HSBC. Khairetdinov fled late last year, after Russian police accused the British bank of issuing false powers of attorney to him. “It is of course entirely absurd and not based on any law,” says Khairetdinov, who is in London. “But it was a way of signaling to the client through me: ‘Don’t complain. Don’t use lawyers.’ ”
The pressure on Hermitage Capital’s lawyers is hardly an isolated case. It echoes the Russian government’s long-running legal campaign against the oil company Yukos, which was broken up and renationalized between 2004 and 2007.
Lawyers acting for the oil giant frequently complained of intimidation, including searches of their offices and confiscation of sensitive documents. Since then, Russian prosecutors have attempted to disbar 14 lawyers who represented Yukos defendants. So far, these attempts have all been rebuffed by the Moscow City Bar Assn., an independent-minded, private organization.
Then there’s the case of Boris Kuznetsov, a Russian attorney who was granted political asylum in the U.S. last year. In 2007, Kuznetsov was convicted in Russia of endangering state secrets after presenting evidence in court that implicated Russia’s security service, the FSB, in illegally tapping the telephone of one of his clients, a Russian senator.
Even by Russia’s standards, the recent murder of Markelov was astounding and shameless. The lawyer and Anastasia Baburova, a freelance reporter for the newspaper Novaya Gazeta, were gunned down near the center of Moscow, just minutes after they left a press conference.
The precise motive for the killings is still unknown, but it is apparently linked to Markelov’s prominent work on behalf of human rights causes. Among his clients were Chechen victims of abuse by members of the Russian military. “What’s especially disturbing in Russia is that the state investigators and prosecutors appear to have been quite superficial in such cases,” says Martin Solc, co-chair of the Human Rights Institute at the International Bar Assn.
Novaya Gazeta, which has had four of its reporters murdered since 2000, observed: “The perpetrators have no fear because they know that they will not be punished.”