American Energy Investor Barred from Russia
LIANE HANSEN, host:
Tensions between the Bush Administration and Russia may cast a shadow over the summer's meeting of the Group of Eight Industrialized Nations. U.S. officials complain about authoritarian trends, as well as Russia's more muscular policy towards its neighbors.
And as NPR's Michele Kelemen reports, the travails of one businessman are putting more stress on the situation.
MICHELE KELEMEN reporting:
When you ask Russophiles what drew them to Russia, you don't usually get the kind of story Bill Browder has to offer. His grandfather was once the chairman of the American Communist Party.
Mr. BILL BROWDER (President, Hermitage Capital Management): Well, my grandfather was the biggest Communist in America. And I'm one of the biggest capitalists in Russia.
KELEMEN: The 42-year-old Browder runs a $4 billion investment fund in Moscow, Hermitage Capital Management. He's been a vocal supporter of Vladimir Putin, even when most Western analysts were criticizing the Kremlin's crackdown on Russian oligarch Mikhail Khodorkovsky and the oil company Yukos.
Browder seemed comfortable with his Kremlin connections, until one day back in November, when he was returning to Moscow from one of his regular weekend jaunts to his second home in London. Russian authorities turned him away.
Mr. BROWDER: And at first I thought it must be a big mistake, because if anything, I'm one of the biggest friends there is in Russia. I've brought $4 billion of capital. I've been extremely supportive in the West of their policies. It couldn't, they couldn't possibly be kicking me out like this.
KELEMEN: The only explanation he got was that his visa was revoked under a law which bans foreigners who pose security or health risks. Browder suspects the real reason is that he stepped on a few too many toes with his numerous court battles to promote shareholder rights and stop asset stripping in the opaque oil and gas companies he was investing in.
Mr. BROWDER: The whole business strategy that I pursued over the last 10 years has been anti-corruption, transparency and shareholder activism. And so I've pissed off a lot of people. And there's no other explanation, in my mind, as to why they would have done this, other than I stepped on the wrong toes. And this is the type of thing that happens all the time. It just never happened to me before.
KELEMEN: This is not just a story about one wealthy businessman running afoul of the Russian system. Russia watchers say it is a sign of just how arbitrary the Russian system is, and a sign that the KGB types are winning in a power struggle with reformers.
Russia's Reformist Finance Minister Alexei Kudrin alluded to this when he was asked recently about Browder's visa headaches.
Mr. ALEXEI KUDRIN (Finance Minister, Russia): (Through translator) As a member of the government, I advocate clear and understandable rules of the game and making these rules equal for domestic and foreign entrepreneurs. Unfortunately, these ideas come to fruition a lot slower than I would like them to.
KELEMEN: State Department officials don't plan to expend any great energy on Browder's case, since he's given up his American citizenship for tax reasons, and there are American academics and democracy activists in similar situations. But U.S. officials and Russia watchers have been intently listening to what Browder has to say, particularly about Russia's oil and gas sectors.
Mr. BROWDER: The Russian gas and oil sector is my blessing and my curse.
KELEMEN: Browder is making big bucks investing in the energy sector. But there's a flip side.
Mr. BROWDER: Russia, as a country, is getting so rich that they stopped caring about what people outside of the country think about them. And that's had a lot of negative consequences, in my own personal case with my visa, but you can see it in all sorts of other diplomatic and international interactions. And I think a lot of people are very worried about the swagger that Russia has got now on the world stage because of this high oil price.
KELEMEN: Bill Browder always seems to find ways to remain upbeat about Russia though. Shareholder rights are, as he puts it, well on their way from horrible to just bad. And though the Russian government is taking control of the Russian oil and gas sector, it is also poised to sell shares in its biggest oil company. As for his personal situation, he's starting to believe what an Italian man once told him in Moscow.
Mr. BROWDER: He said, after 10 years of living here, I thought I understood the Russians. After 35 years, I realized I'd never understand them.
KELEMEN: Browder had 10 years under his belt before his Russian visa was revoked.
Michele Kelemen, NPR News, Washington.
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