Above and Beyond

Even death hasn’t stopped the Kremlin’s persecution of Sergei Magnitsky.

When my Russian lawyer, Sergei Magnitsky, died in police custody in November 2009, I thought that there was a good chance of getting justice for him from the Russian legal system for what I believe to be his murder. Unlike in many other human rights abuse cases, there was a mountain of documentary evidence proving exactly who killed him.

Sergei had given official testimony to Russian investigators prior to his arrest describing how the police were involved in stealing our companies as well as the $230 million in taxes we had paid to the Russian budget. Official police documents show that the same police officers who Sergei testified against arrested him. After his arrest, Sergei wrote 450 complaints during his 358 days in detention detailing exactly how his rights were violated and who did what to him at every different moment of his horrible ordeal. His complaints showed how specific state officials and judges refused his desperate requests for medical care, fabricated evidence to keep him locked up, and moved him through dozens of cells.

As Sergei was being tortured in detention, the Russian officials who approved the largest known tax refund fraud in Russian history, and their families, got inexplicably rich. On Nov. 16, 2009, Sergei went into critical condition from the withholding of medical care. Only then did the authorities move him to a prison hospital, but instead of treating him, they put him in an isolation cell and let eight riot guards with rubber batons beat him for one hour and 18 minutes until he was dead. He was 37 years old. There is nothing debatable in this story. It was laid out in great detail by the Moscow Public Oversight Commission on Dec. 28, 2009, and then subsequently by President Dmitry Medvedev's own Human Rights Council on July 5, 2011.

Unfortunately, contrary to my initial hopes, there has been no justice. Just the opposite. The entire apparatus of the Russian government has circled the wagons to protect every official involved. The Interior Ministry officers who arrested Sergei, denied him medical care, and tortured him to death received state medals and were promoted. The Russian Investigative Committee has exonerated 58 of the 60 officials for whom there is clear evidence of their involvement in the case. (They are only prosecuting the two prison doctors for negligence). The Russian courts have refused dozens of appeals for justice filed by Sergei's family, friends, and activists. Perhaps the most dramatic development is that instead of prosecuting the people who killed Sergei, the police have now launched Russia's first-ever posthumous prosecution against him. Even Joseph Stalin never went that far.

What's more remarkable is that this coverup is not going on in the shadows. Every development in this case is being reported in detail in Russia and abroad. The Levada Center has surveyed Russians and found that 60 percent believe Sergei was deliberately denied medical care. If you search for the name "Magnitsky" on Russia's largest search engine, Yandex, you get 18,990 news articles that have been published in Russia about every minute detail of the case and the coverup since he was killed. The YouTube video series "Russian Untouchables," which shows the illicit wealth of the officials exposed by Sergei, has been watched by millions of Russians.

The facts of this case are so damning that the U.S. Congress, the Canadian Parliament, the European Parliament, and the national parliaments of 10 European countries are taking the unprecedented steps of preparing visa sanctions and asset freezes on the officials who killed Sergei. They are the first sanctions against Russia since the dissolution of the Soviet Union 21 years ago.

With all this going on, it gets harder and harder to understand why the Russian government persists in this coverup. Whose interests are they fighting for? Certainly not the national interest: Government coffers have lost $230 million from this one theft (and certainly a lot more from identical thefts perpetrated by the same officials previously and since). Young people are looking at what happened to Sergei and wanting to leave Russia as a result. Investors are looking at what happened to my lawyer and me and are thinking twice before investing in the country. So why would the government continue to protect his killers and the people who defrauded the state?

Could it be that Medvedev and the soon-to-be reelected Vladimir Putin just don't understand what really happened? That's hard to believe, particularly because Medvedev publicly acknowledged on July 5, 2011, that he thought crimes were indeed committed after he was presented with the findings his own Human Rights Council report. As for Putin, he has been noticeably silent on this case, but it's hard to believe he hasn't read even one of the 18,990 articles that lay out the facts in detail.

Perhaps these two men don't believe the newspapers and genuinely believe the Interior Ministry's version of events, that Sergei was a swindler who died of natural causes. This seems implausible as well. In normal countries, leaders would generally believe their own officials, but Russia is not a normal country and everyone knows to distrust the Interior Ministry. And in this case, there is just so much objective information to disprove the ministry's story. It was widely reported that complaints with evidence gathered by Sergei about the officials involved in the thefts had been filed with all government investigative bodies three weeks before the crimes were committed, which would have stopped the crimes if they had been acted on. It was also reported that the same state officers and criminals who had committed the $230 million theft in 2007 had been involved in identical thefts a year earlier. And it is hard to look at the pictures of Sergei's bruised body and conclude his death was from natural causes.

If Putin and Medvedev don't believe the Interior Ministry, perhaps their inaction is explained by an inability to control the law enforcement agencies. That is how First Deputy Prime Minister Igor Shuvalov explained the inaction in the Magnitsky case to 100 of the world's most important CEOs at the World Economic Forum in Davos, Switzerland, in January. He said: "The law enforcement agencies are a law unto themselves."

This explanation seems entirely ridiculous as well. Russia is a vertical power. Anything that Putin says is immediately acted upon. If there is one country in the world where a phone call from the president or prime minister gets fast results, it is Russia.

As we exhaust the plausible reasons why the government has done nothing, it leads us to one unpleasant conclusion. The president and prime minister are actually involved in this scandalous crime. They may not be direct beneficiaries, but they have tacitly allowed their subordinates to commit these acts with full knowledge and, afterward, provided them with cover and impunity.

Putin and Medvedev may very well be committing similar acts of their own and require the system to function without upset or interruption. It is becoming increasingly obvious that the entire government apparatus in Russia is not there to provide leadership and services for the Russian population. Instead, it functions only for top officials to steal as much money as they can and destroy whoever stands in their way. Putin cannot steal and then disapprove of his ministers stealing. That just wouldn't work.

Perhaps this is an obvious fact that all Russians know, but what has not been obvious until the Magnitsky case is how much damage Putin and Medvedev are willing to inflict upon the Russian people to keep this plundering in place. I don't think there has been a government scandal in Russia in the last 12 years that has outraged and touched every Russian as much as the Magnitsky case. There is no obvious upside for incurring that cost, other than to maintain this system of theft.

As a foreigner looking at March 4's Russian presidential election this Sunday, I completely understand why people are out on the streets. Each day there is a Russian headline about a "Second Magnitsky," another victim of police abuse and of complete lawlessness. Each day someone is arrested or threatened with criminal prosecution for speaking up. Everyone has their own version of the Magnitsky story, and nobody in Russia can want these crimes to continue. The question for everyone is how hard will Putin and Medvedev fight to keep this system in place? If one judges by this case, it's hard to imagine that they won't stop at anything.

Unfortunately, that is a very scary thought for the future of Russia, as long as this regime remains in power.



The Driller in Chief

President Obama's critics say he's been a disaster for the energy industry. But the numbers tell a different story.

It was a strange scene even by the standards of an odd primary season. Rick Santorum, fresh off a narrow loss in Michigan, started waving about a hunk of jet-black rock during his concession speech on Tuesday night, Feb 28. "Yeah, this is oil," he explained. "Oil. Out of rock. Shale." But not under this American president. Like his fellow candidates for the Republican presidential nomination, as well as most of the fossil fuel industry, Santorum is convinced that Barack Obama is out to kill oil and natural gas. "We have a president who says no," he warned. "We need a president who says yes to the American people and energy production!"

It's a potent line in a country where many assume that Democrats despise oil and gas. Their instinct is sometimes right: There are large segments of the party that have never encountered a fossil fuel development that they liked. But Obama doesn't fit that mold. Indeed there is a strong case to be made that he, not his opponents, offers the best hope for American oil and gas.

Let's start with the statistics. After falling every year from 1991 through 2008, U.S. oil production has climbed for three years in a row. U.S. oil imports started to drop in 2005 under President George W. Bush, but Obama's policies haven't stopped the trend. Last March, Obama announced a target of cutting oil imports by a third by 2020; less than a year later, the United States is already more than halfway there. Natural gas production is also surging. The United States hit rock bottom in 2006, at which point the shale gas revolution began to re-energize the sector. That boom has continued since Obama took office. It's tough, in other words, to square claims that Obama is destroying American oil and gas with the record production numbers that the industry is posting year after year.

Statistics, of course, can be misleading. Most of the groundwork for what's happening now was laid before Obama took office -- and markets, not policymakers, can take most of the credit for the oil and gas sector's strong performance. Critics will argue that because the energy business moves slowly, many of the biggest consequences of the president's policies have yet to be felt. What might surprise them, though, is that this is where Obama could have the best story to tell.

Take the battle over fracking, a controversial technique used to unlock massive deposits of oil and natural gas in underground rock formations that has come from nowhere to become one of the most critical features of the U.S. energy scene. Santorum and his acolytes are convinced that tough regulation will kill this key driver of the U.S. energy boom. But if the Deepwater Horizon oil spill in the Gulf of Mexico taught us one lesson, it's that lax regulation -- in enabling industry mistakes to gut public support and confidence -- can be far more damaging. A spate of dumb and preventable accidents by poorly regulated shale developers would do far more to set back U.S. oil and gas development than some smart minimum standards set out at the federal level.

This White House has signaled that it prefers precisely such an approach, though precise details haven't yet been forthcoming. Undoubtedly, some in the administration would like to see a dominant role for the federal government and regulations that could hit the industry harder than is needed. So far, however, they appear to be losing. Last year, Obama had his energy secretary appoint a group of industry experts and environmental authorities to advise him on shale. The team, which included prominent shale enthusiasts like Daniel Yergin and John Deutch, produced a string of recommendations that were widely seen as constructive rather than adversarial. Fuel Fix, a news service run by the Houston Chronicle, described them as an "olive branch to industry."

The Obama administration has a particularly strong case to make when it comes to natural gas. Smart developers aren't crying because Obama has put too much gas out of reach -- they're terrified because production is so strong that collapsing prices have crushed their bottom lines. The best way out of this situation is to find new uses for natural gas. Although markets will play a critical role in this endeavor, the most powerful approach is to get government involved. For those who believe in the urgency of fighting climate change, the right step is obvious: Adopt policies that replace coal-fired power with natural gas, which would slash carbon emissions and clean up the air at the same time.

Indeed, the worst political news for the gas industry in the last few years should have been the collapse of a signature Obama initiative: cap and trade. A modest cap-and-trade program would have increased the price of coal relative to that of natural gas and encouraged utilities to switch to the cleaner-burning fuel, just as it has in Europe. The best hope for boosting gas demand going forward is some variation on that theme, be it Clean Air Act rules that favor gas over coal or a clean energy standard that creates preferences for cleaner fuels, including gas. Both are policies that Obama has championed -- and that his adversaries have opposed.

None of this is to suggest that Obama's record on energy is without blemish. His delay last November of the Keystone XL pipeline sent an unfortunate signal to developers and markets that the administration was willing to waver on oil development when politically pressed to the wall. The administration's insistence that developers quickly drill on their leases -- known as "use it or lose it" provisions -- is difficult to square with how development works best. There is also a legitimate debate to be had about whether more federal lands might prudently be opened to energy production. In particular, though the Gulf of Mexico oil spill was good reason to take a fresh look at offshore drilling, Obama should probably have pressed forward with his March 2010 plan to open more waters to production rather than reversed course.

But most of the other criticisms from administration opponents fall flat. The White House, for example, has been called out for railing against oil and gas industry tax subsidies. But with the exception of the "intangible drilling costs" deduction, which can help smaller and more nimble oil and gas companies with their cash flow, these benefits are largely without merit; instead, they simply transfer money from taxpayers to producers' bottom lines. Obama has been attacked for slow-rolling offshore drilling permits in the wake of the Gulf of Mexico disaster, but the alternative could have allowed unsafe projects to proceed -- and another spill would have been devastating for the environment and development alike.

While Obama's opponents continue to attack him for his supposedly anti-development policies, one group seems to have figured him out. When TransCanada announced on Feb. 27 that it would go ahead with a segment of the Keystone XL pipeline and the White House embraced it, the response from a leading environmental organization was far from supportive: "Splitting the project means double the trouble," the Natural Resources Defense Council declared, en route to savaging those who would disagree. When the president spoke up in favor of a smart approach to oil and gas in late February, Joe Romm, a prominent climate blogger at the Center for American Progress, responded with a biting headline: "'All of the Above': Obama Names His Failed Presidency."

The attacks from the right and the left must make for a lonely White House -- and that should make those people who genuinely desire prudent energy development worried. Instead of attacking Obama for sins not committed or fixating on the handful of places where they differ from him, they should lend support to the president's surprisingly constructive policies. Both the hands-off alternative that his opponents advocate and the (at best) ambivalent approach that many of his erstwhile allies prefer could be far worse.

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