I am Bill Browder, founder and CEO of Hermitage Capital Management. I was the largest foreign investor in Russia until 2005. Since 2009 when my lawyer, Sergei Magnitsky, was murdered in police custody after uncovering a $230 million fraud committed by Russian government officials, I have been leading a campaign to expose Russia’s endemic corruption and human rights abuses. Ask me anything.

PROOF: http://imgur.com/5AFZGd1

Victoria will be assisting me via phone.


Update: Thank you all for spending some time with me today. If this topic interests you, please check out my book RED NOTICE and I promise you won't be bored - if you read the first 10 pages, you won't be able to put it down until you finish the book.

Comments: 77 • Responses: 23  • Date: 

GM_crop_victim12 karma

Hi Bill, two questions:

  • As someone who profited off the shady 1996 privatizations in Russia, don't you think you should have a bit more introspection before advising that country again on domestic policy? Are you even on record at the time complaining about the bogus auctions? I'd love to see that. That would make you at least consistent on the issue of Russian corruption.

  • Who killed Litvinenko? For a while I assumed it was Putin, but then I looked into the 2004 killing of journalist Paul Klebnikov. Klebnikov had exposed the corrupt Boris Berezovsky, famed oligarch, and I assume an ally of yours during the privatizations. Berezovsky seems to have been allied with Chechen gangsters and possibly blew up the apartment blocks in 1999. What reason could Berezovsky have had to kill Litvinenko?

Obviously, Putin is a horrible autocrat and RIP to Mr. Magnitsky, just so you know I'm no shill.

BillBrowder12 karma

There were several different types of privatizations in 1996.

"Loans for shares" privatizations were clearly shady, and I had nothing to do with that. But I was critical.

However, "voucher privatization" was open to anybody & transparent. I wouldn't argue that either of them were good policy, but if you go back and read any of my quotes from the time, you will see that I am entirely consistent on that issue.

As for Litvinenko, why don't we wait and see the results of the inquest in London which is currently going on, which will be far more informative than me speculating on reddit.

artemy6 karma

Hello, Bill

Being Russian, I've heard quite a lot about your story, but how did you felt about doing business in Russia in the beginning? What opportunities did you see there, and what have you thought of the Russian future back then?

BillBrowder12 karma

When I first arrived in Moscow in 1996, I felt like the country was in a state of chaos, but I was hopeful that it would become less chaotic and more normal as time went by.

I thought that Russian was in the transition from "horrible" to "bad," and then potentially to "good."

However, since Putin's second term, it's gone from "bad" back to "horrible."

axionestin6 karma

Hi Bill,

I recently did an interview with Karen Dawisha, author of Putin's Kleptocracy, who noted that part of what we're seeing now is Putin trying to maintain authority over this "inner group," many of whom have been with him for decades. As that group has grown, keeping them placated has become more and more difficult. Do you think we're near a breaking point in the kleptocracy — if there is one? And what can we expect if there is a disintegration of Putin's inner circle?

BillBrowder10 karma

In my opinion, Putin governed Russia in the past with 90% bribery, 10% repression. Now that they are running out of money, it's going to flip over to 10% bribery, 90% repression, and I don't believe that his repression apparatus will hold together and therefore it is not sustainable - we just don't know how long it's going to take.

just_some_guy19765 karma

What the hell is Russia doing in The Ukraine??

BillBrowder14 karma

I believe that Putin's invasion of the Ukraine was done solely to distract public opinion from his own kleptocracy. Putin's previous experience invading Chechnya got him elected and his current attack is one to keep him in power.

just_some_guy19761 karma

Do you feel that this is the beginning of something bigger? I mean, will he stop with The Ukraine, or do you think this crisis could envelop other former Soviet states?

BillBrowder8 karma

Putin has invaded Ukraine to distract his own people. The worse the economic crisis gets in Russia, the more his people need to be distracted. Therefore, I think it's very likely that he won't stop at just Ukraine. And my biggest fear is that he'll eventually try the same tactics in the Baltics, which are members of NATO.

beernerd5 karma

What did you invest in?

BillBrowder10 karma

My investments were in the Russian stock market, in "blue chip" Russian companies like GazProm, Lukoil, etc.

Unfortunately I found a lot of corruption in those companies.

beernerd3 karma

Was the corruption fairly obvious, and most people just wrote it off? Or was it only apparent if you knew what to look for?

BillBrowder8 karma

The corruption has always been obvious in Russia, although the details of how they executed it were often very murky. We spent a lot of time studying the details and exposing the details, which created (for some period of time) a good investment opportunity, but which eventually led to my expulsion.

stetsura4 karma

Hey Bill! as an american living and doing business in Kyiv, Ukraine since 1995, i can really relate to a lot of your memories from the early years! THANK YOU. (especially poignant: the prison yard comparison) How long does Putin have? two, three or more years? before they take him down? Ukraine has a lot of work to do.... need him OUT of Ukraine's territory. Best regards from Kyiv!

BillBrowder6 karma

I don't know how long Putin has and he doesn't know how long he has. We're in totally uncharted territory here. Russia could follow the Zimbabwe / N. Korea model, and destroy the situation for decades, or it could all come tumbling down like it did for Yanukovych.

I'm glad you enjoy my book. Most people who have experience out there can relate to many of the stories.

bill-of-rights4 karma

With the huge drop in the ruble there must be some amazing but perhaps very risky investment opportunities for the small investor - can you recommend any at this time?

BillBrowder9 karma

My best recommendation is to stay out of Russia. You might be able to make money in the very short term, but $1000 invested today will be worth a lot less in 5 years as Putin imposes currency controls and starts expropriating more companies when they run out of money.

Asymmetric_Warfare4 karma

Hi Bill I have two questions also,

Do you believe that Russia can withstand ongoing economic sanctions from the west?

Do you believe western business's will have confidence to begin investing in Russia again after so many hostile state take overs and privatizations of private companies?

Thank you.

BillBrowder7 karma

The current sanctions forbid Russian companies from refinancing their debt in the West. At the moment, there are $650 Billion of corporate debt, and less than $400 Billion of hard currency reserves. Therefore, Russia will quickly run out of money if oil prices don't rebound.

And no, I don't know any rational Western businessman who would want to go into Russia based on the toxic investment climate.

dereksmalls19854 karma

Hello Bill and thanks for doing this AMA! Do you think Putin's time is drawing to a close or is he essentially a dictator at this point?

BillBrowder8 karma

He's definitely a dictator whose time may be drawing to a close - or he may be able to hold on for a very long time. None of us know.

gtt4434 karma

Are there any Western leaders or influential public figures whose understanding of Kremlin you would describe as exceptionally comprehensive and accurate?

BillBrowder8 karma

Yes. The two Western leaders who truly understand the Kremlin are the President of Estonia and the President of Lithuania, both of whom understand Putin completely. Unfortunately, leaders of much bigger, more important Western countries still believe they can negotiate with Putin and appease him, which is not possible.

9083 karma

why you concentrated on Russia - back then - and not the baltics, ukraine or kazakhstan ?

BillBrowder5 karma

Because Russia was a very big market, with many, many different opportunities, whereas the other countries were much smaller and less developed, and their capital markets were smaller and less developed as well.

soderkis3 karma

Hello Bill,

What is the major change do you think between Russia of the 90s and the Russia when you left it? Also, was there some indications that thing were going wrong that you now see, but that you didn't realize back then?

BillBrowder6 karma

The major change was that Russia went from a country of many oligarchs to a country with one oligarch: Vladimir Putin.

My big mistake was not recognizing Putin's mal-intent early enough.

noktoque3 karma

Would you say Kremlin-controlled propaganda outlets have a significant impact on how Western public opinion perceives Kremlin?

Does the West need to increase its efforts of countering Kremlin propaganda industry (such as RT, Sputnik, its many pseudo-think tanks, etc.)? Do you think our governments need to get involved, or should it be left to our free media to handle?

BillBrowder8 karma

I was just looking at an opinion poll today, about perceptions of Putin in the West and in most countries he has an overwhelmingly high disapproval rating - as high as 80% in America and Western Europe. So however much money he seems to be spending on his propaganda it seems to be falling on deaf ears. As much as they try to spread misinformation, in the West it doesn't seem to be working. Unfortunately, in Russia, the propaganda works perfectly, because there is no competing information, and that's where the problem really lies.

TiltedWit3 karma

Hi Bill, thanks for taking the time to answer questions.

In your opinion, what (if anything) was the most detrimental and fundamental change in Russia between the time you formed HCM and 2005?

BillBrowder7 karma

The most fundamental change was when Putin won his war with the Oligarchs back in 2003 by arresting Mikhail Khodorkovsky. When the rest of the oligarchs in Russia saw the richest & most powerful oligarch sitting in a cage, they went to Putin and said "What do WE have to do so we don't end up in a cage?"

Putin's answer to that was "50%."

From that moment on, he became the biggest oligarch in Russia.

Steinburglar3 karma

Hi Bill, what made you initially support Putin? Was it just a strategic business move or did you see him as a temporary and competent administrator? When did you first begin to have doubts about his government?

BillBrowder9 karma

When Putin first came to power, I thought he was going to clean up the mess of the oligarchs, who were allowed to take over Russia in the 1990's. I was hoping that Putin would fulfill his promise and restore order in Russia, so the average Russian citizen could live a normal and dignified life. My doubts first surfaced in 2004, when Putin allowed GazProm to be purchased for $13 billion, which was right after the Russian government expropriated Yukos for free. I didn't understand why one oligarch should be treated so well, when another one had been destroyed.

And that's when I started to doubt Putin's sincerity.

Kennigit3 karma

Hello Mr Browder. I've been following your story for some time, and it's truly a chilling tail.

My question is if there are other things happening in your life outside of the Russian government's attempted to push Interpol into serving a Red Letter....Do you receive phone calls late at night or other forms of harassment? Are you followed? Do you maintain personal security? Have you felt any direct threats to your life since beginning your campaign?

BillBrowder10 karma

The Russian Government and their associates have used all sorts of legal and extralegal tools to try to silence my campaign.

Many of these attacks have been publicized - like Interpol, like death threats, like bogus legal proceedings, and some haven't - for various security reasons.

kustav_glimt3 karma

Hi Bill, thanks for doing this Ama. As a law grad. who thoroughly read through the Sergei Magnitsky case, what was your reaction when Khodoroovsky was released and also what is your take on the ongoing issues is Eastern Ukraine?

BillBrowder4 karma

I was relieved when Khodorkovsky was released. Even though we were at odds with each other 10 years ago, he was clearly unjustly persecuted by Putin and had my full sympathies.

I believe his movement into Eastern Ukraine, as I said before, is to distract the Russian people from his own kleptocracy and mismanagement of Russia.

The_Milkman2 karma


BillBrowder4 karma

The Global Magnitsky Act has just been relaunched 10 days ago with a rock-solid group of Senators & members of the House of Representatives. I think you'll see much more momentum for it in this next session of Congress and hopefully it will pass. Thank you for your support.

SDJ672 karma

Thanks so much for doing this! Three questions: 1) I am curious how you think investing could be used to increase opportunity and growth in third world countries? What type of investments do you think would create the most positive social impact while still being financially feasible? 2) To follow up on that question, how does an investor deal with corruption or problematic leaders (such as numerous African developing nations struggle with) when trying to make investment choices? 3) Any general words of wisdom to a business student (me!) that you wish you would have known when you were starting out?

Thanks again! You are a very inspirational man.

BillBrowder3 karma

  1. & 2.) I think direct investment in small and medium-sized enterprises in Third World countries in the right sectors can make sense. However, if the political or economic situations of those countries are unstable, then it is very difficult for many places to attract capital. At this point in my investment career, I avoid entirely countries where there is corruption, after seeing the terrible consequences of corruption in Russia.

3.) I would stay away from countries where there is corruption, and focus on situations with honest, hardworking people.

T1mac2 karma

Who is the biggest beneficiary of the corruption in Russia? Do you think the problem is worse now with the recent crash of the economy and the fall of the ruble?

BillBrowder7 karma

Well, Putin and the top 100 officials working for Putin are the biggest beneficiaries of this corruption. And yes, I think that as the pie gets smaller, all of the bad guys start fighting with each other over less money to steal.

SubSpark1 karma

Hi Bill, what's your view on reverting to Gold Standard backed currency?

BillBrowder2 karma

This is a broader question than today's interview.

I feel very uncomfortable about all the money printing going on in the world, but there are too many issues to discuss in one quick answer.