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Analysis & Opinion
09.06.10 Manipulating Magnitsky
By Tom Balmforth

Oleg Logunov, a department head at the Prosecutor General’s Office, yesterday claimed that Sergei Magnitsky, who died of heart failure in custody last November, had not filed any official complaints about heart trouble, and that he simply died “suddenly.” Logunov also made a string of detailed accusations against Magnitsky, and Hermitage Capital Management CEO Bill Browder. As Hermitage representatives today rubbished the claims and fired accusations back at Logunov, the conflict between the company and high-profile government officials seems as fresh as ever. Justice in the Magnitsky case, however, remains elusive.

In an exclusive interview with Business FM, later posted on his Web site, Oleg Logunov claimed that Sergei Magnitsky’s death in pretrial detention was “sudden” and that the former Hermitage lawyer had never complained about having a life-threatening heart condition.

“There were no verdicts on the Magnitsky case reached by doctors at all. He had gall stones, which did not prevent him from being kept in a place of detention. And Magnitsky never made any complaints about his heart. The death was sudden,” Logunov said yesterday.

Magnitsky was arrested at the end of 2008 on tax evasion charges and held in the now infamous Matrosskaya Tishina pretrial detention center, where a businesswoman, Vera Trifonova, recently died after being denied medical treatment. Magnitsky’s death following a heart attack last year on November 19 sent shock waves round Russia, as the Hermitage lawyer was seen as the latest victim of the feud between the investment fund and high-level government officials.

“I found Logunov's interview both dishonest and revealing. In fact his omissions and misstatements are so revealing I think he is going to regret having spoken,” said Jamison Firestone, a Hermitage Capital lawyer and former boss of Magnitsky.

A diary kept by Magnitsky describes how he fell ill in Matrosskaya Tishina and was then transferred to the Butyrskaya Prison facility where there were no medical facilities. Eventually he was returned to Matrosskaya Tishina where he died.

“Logunov’s lying,” said Lyudmila Alexeyeva, head of the Moscow Helsinki Foundation. “We have evidence such as Magnitsky’s diaries and copies of his appeals to various government institutions. Logunov’s lying just like various representatives of the authorities here do.”

One diary entry reads: “in most cases, filing complaints about the conditions of confinement does not lead to any change whatsoever. It gives the impression that the majority of complaints and requests addressed to the administration of Butyrskaya Prison are simply ignored, and after filing such complaints the conditions of my confinement worsened very significantly.” The record ends with a catalogue of requests and complaints that were ignored.

Firestone said Logunov had deliberately chosen his words yesterday to obscure what had really happened to Magnitsky. “When Mr. Logunov said that Sergei never complained about his heart, he was telling the truth. But he was intentionally trying to create the false impression that Sergei didn't complain about his medical conditions and the intentional denial of medical care which killed him,” said Firestone. “Sergei didn't have a heart problem, but he did complain hundreds of times (and we have copies of all his complaints) about needing medical care for the serious, painful, and completely treatable medical problem that he did develop in prison, and not getting it.”

Trading Accusations

Firestone said that Magnitsky was refused “life-saving” medical treatment because he refused to change his testimony against the Interior Ministry officers implicated in the theft of state money in 2007. Logunov yesterday rubbished claims that the case opened against Magnitsky was in the first place revenge for Hermitage having openly accused Interior Ministry officers of corruption. Logunov claimed the case against Magnitsky was “absolutely founded.”

“There is criminality in [Magnitsky’s case] and it is clear.” The general prosecutor went into detail about the charges against Magnitsky, which also implicate Bill Browder, the CEO of Hermitage.

Logunov said Magnitsky, usually thought of as a lawyer, was actually an economist who had masterminded a tax evasion plan for Hermitage. According to Logunov, the General Prosecutor’s Office has files of evidence extracted from Magnitsky’s computer that prove an elaborate tax evasion scheme, which turned a profit of 505 million rubles ($20 million). The investment fund apparently registered employees on Russian “work books” (lifetime booklets where Russians transcribe all of their places of employment), which actually belonged to real disabled Russians. Using these official records of employment, Hermitage was able to feign having handicapped employees on its payroll who were actually not capable of working for the investment fund. Thus Hermitage was eligible for big tax breaks in line with Russian law.

Firestone simply dismissed the allegations as “lies.” He said Hermitage had indeed been investigated for the legitimacy of its disabled staff, but that these charges had been cleared over five years ago. “In 2004 and 2005, the Kalmykia Republic authorities spent six months investigating whether disabled employees were legally employed and whether the companies had the right to use the tax preferences. They concluded that they did and closed the investigation. By 2008 the statute of limitations had run and this case could not legally be opened again,” said Firestone.

Firestone said that Logunov had a vested interest in the case. Logunov’s “colleagues” are the Interior Ministry’s Lt. Col. Artem Kuznetsov and Pavel Karpov, both of whom were involved in corporate raids on Hermitage in 2007, he said. In February 2008 Hermitage finally got a case opened against Kuznetsov and Karpov when the two immediately reopened (illegally) the tax evasion case against Hermitage. Magnitsky subsequently testified against Kuznetsov and Karpov in October 2008.

“These officers then fabricated evidence, made Magnitsky a suspect, and accused him of organizing tax avoidance in Kalmykia seven years prior. That is clearly retaliatory and also ridiculous considering that the entire case, including Sergei's recent inclusion in it as a suspect, had been fabricated by the men Sergei had testified against,” said Firestone.

Firestone said that Logunov was trying to hide his personal involvement in the case. “Sergei was indicted under the fabricated case that was reopened in Kalmykia under Logunov's supervision. He was then detained in prison because [an] investigator [] claimed he had applied for a UK visa and might run away. The UK Embassy wrote a letter confirming that Sergei had never applied for a visa and therefore Sergei's lawyers asked for his release. Mr. Logunov then made a completely unlawful decision to keep Sergei in detention when there were no facts which justified this,” said Firestone.

Logunov dedicated considerably more space in his interview to attacking Magnitsky and Browder. Asked whether Browder was justified in his allegations that Magnitsky was being held in order to force self-incriminating evidence out of him, Logunov (rather repetitiously) said: “The fact is that investigations in all countries – in Russia and any other countries – are always interested in getting evidence on the accused or those who are under suspicion.”
Logunov then emphasized that talking about Browder being victimized in Russia is a “big exaggeration.” “It’s useful for Browder, of course, and raises his profile in the West and makes him into a kind of hero,” he said.

Prospect of Justice

The Magnitsky case has become something of a cause c?l?bre. It has even hit the stage at the edgy Teatr.doc in Moscow in a play entitled “One Hour, 18 Minutes,” which recounts Magnitsky’s last moments based on personal accounts from those involved.

Allison Gill, the head of Human Rights Watch’s Moscow bureau, said: “I think it is important that Magnitsky’s death be treated as its own separate issue, whether or not there is any basis for criminal charges against him.”
“If someone dies in custody, according to international standards, the state has to disprove wrongdoing – the presumption is that the state is responsible until proven otherwise,” said Gill. “I have not seen any satisfactory evidence yet that would say that the state has fully fulfilled that obligation.”
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