WILLIAM BROWDER

Well, my trades are going to be out of the ordinary. My background is out of the ordinary. I grew up in Chicago, born in Princeton, New Jersey, but I come from a very unusual family. My grandfather was the head of the American Communist Party between 1932 and ‘45. And so when I was going through my teenage rebellion, in the 1970s, I was trying to figure out a way of rebelling from this family of communists and growing my hair long – it grew into an afro, you can’t quite tell that now. But strangely, that didn’t upset my family. I followed the Grateful Dead around the country for a few months and that didn’t upset my family. But then I put on a suit and tie and became a capitalist, and that really did upset my family. So became a capitalist. I went to Stanford Business School. I graduated in 1989, which was the year that the Berlin Wall came down. And as I was trying to figure out what to do after business school, I had an epiphany one day, which is that if the Berlin Wall just come down, and my grandfather was the biggest communist in America, he tried to become the biggest capitalist in Eastern Europe. And so that’s what I set out to do. And I eventually moved to Russia. In 1986, I set up an investment fund called the Hermitage Fund, which grew eventually to become the largest investment fund in the country. So, I achieved my dream.

MAGGIE LAKE

What sort of impression did that interesting family background leave on you? You mentioned you were rebellious – because you not only had activists, but you also come from a long line of academics as well, don’t you?

WILLIAM BROWDER

Yeah. So my grandfather was the communist and my father and his two brothers, they all became mathematicians. My grandmother was Russian. She was a Jewish intellectual and there was no higher calling for a Russian Jewish intellectual than for somebody to go into sciences. And within the sciences, there was no higher calling than to be a theoretical scientist and mathematician was top of the heap. And so they all became mathematicians. My father skipped high school, went to MIT at the age of 14, finished when he was 17, and then went to Princeton and got his PhD in mathematics from Princeton by the time he was 21. And so my brother followed in his footsteps, went to the University of Chicago after skipping high school at the age of 14. Phi Beta Kappa, and physics by 17. So, this was the family I came from. So you can understand why I had sort of a need to rebel. I was just a normal person, I wasn’t doing any of this skipping high school. And so I needed to find some way of like, distinguishing myself, and so I set out on a completely different path.

MAGGIE LAKE

This brings us to your first trade, you call one of your worst. And that’s going to Russia in 1992, right after completing your studies in Stanford, instead of going to work at a firm like all of your other friends. So that’s definitely going to be hindsight. But take us back to that time. What were you thinking? What did you hope your rush experience would be? It was like a gold rush, right? You were gonna go find your fortune and define yourself.

WILLIAM BROWDER

So I moved to Russia in 1996. This was at that point when Russia was just beginning its privatization program. So Russia previously, I guess before the Berlin Wall came down, was part of the Soviet Union. And as a Soviet Union, it was communist country, everything was owned by the state. The state set the prices, salaries – everyone was equal, etc. And the whole thing was bankrupt. It didn’t work. Nobody worked. Everyone pretended to work. It was just a terrible, terrible economic experiment that didn’t work. And so after the Berlin Wall came down, after the Soviet Union collapsed, and after Russia became an independent country, one of the things that they declared was that they were going to create capitalism. And how do you create capitalism? Well, one thing they did was they decided they were going to give away all state property away effectively for free, one way or another, to the people. And they embarked on this mass privatization program where they created all sorts of different schemes to supposedly give away everything to the people. What ended up happening was not what they designed. Instead of everybody benefiting, 22 oligarchs ended up controlling more than 40% of the gross domestic product of Russia, which was highly unfair. It wasn’t anything what they envisaged and it of course, led to all the terrible problems that we have today. But for me, at that time, they controlled 40%, but there were little crumbs falling off the table. And effectively, by giving everything away, the government created a sort of chaotic market situation. But the valuation of the companies that they had put out there – the oil companies and gas companies and electricity companies – was at a 99.7% discount to the price of comparable companies in the West. And so you could buy, you know, Gazprom or Lukoil at pennies per barrel of reserves, when these companies, if you were to buy them by the same type of companies, Exxon BP, you know, whatever, Shell, they would trade at $20 for a barrel of reserves. And so it was really, truly like the gold rush and you didn’t have to have that much imagination. People sometimes ask me, you know, they say “your father was a mathematician, you must have been really good at math?” Well, the only math that I had to do was simple division. You know, you divide the market cap of the companies by the number of barrels of oil reserves, and you get this unbelievable discount. And so then the only question is, will they let you keep it or not, because if they take it away, it’s worth zero. But if they don’t take it away, it’s probably worth 10/20/30/40 times the amount of money that you invest in. I didn’t have any specific insight, but I just said, “you know, probably there’s a 50% chance they take it away, and we walk away with zero, and there’s probably a 50% chance that you make 10/20/30/40 times your money.” And I thought that was a pretty good bet. I went around and set up this investment fund, and I told my prospective clients, “Look, you know, take 1% or half a percent of your money, and try this. If it doesn’t work, you lost half a percent of your money, maybe 1%. If it does work, maybe it turns into 20% of your net worth, which would be meaningful.” And, yeah, that was a compelling argument for a lot of people. And that’s what was the basis for my business, my investment fund.

MAGGIE LAKE

So it’s very much like prospecting, and it’s kind of frontier, right? And you’re kind of in the middle of this huge change. What were your initial impressions of Moscow like? I assume you lived in Moscow. Did you speak Russian? Did it seem like an exciting time? Did you think “this is so different from what I’m used to”? What did you think? You were very young. I mean, you just had got out of Stanford, right?

WILLIAM BROWDER

I think I moved there when I was like 28 years old. It was total, dangerous chaos. People were getting killed, left, right, and center. By criminals. I mean, everybody, you know, people ready to kill for $5,000. And there’s a lot more than $5,000 sort of sloshing around in these markets. But it was also really exciting. I mean, you literally could buy something on a Monday, and then have it be worth, you know, 5-10 times on a Friday. And I was not playing with small sums. My fund started with $25 million, and grew from there. It was really just like the gold rush. And the great thing about it was that when I got there, nobody knew anything more than I did about how to invest. It wasn’t like there’s a bunch of 55 year old men who had been around for 30 years, you know, sharpening their knives and their skills and having to work your way through some ranks. There’s an expression “in the land of the blind, the one eyed man is king.” And I showed up there and had one eye and just by being on the ground and being one of the few Westerners who had bothered to show up there and do the basic math and homework, I had this unbelievable competitive advantage. It really was, sort of, fast forward in terms of life responsibility and success at a very young age.

MAGGIE LAKE

That time is often referred to the wild 90s from Russians themselves. Did it feel like that? You talked about it being dangerous, but there was also, after all this time in communism, this sort of, you know, wealth and all of what we think of, in any roaring period for our country? Did it feel like that?

WILLIAM BROWDER

It was totally Neolistic. I mean, there was a very dark side to the whole thing, which is that it was very exciting to be a business person there. But it was also very terrible to look at how this new capitalism was affecting the average Russian. The life expectancy of a male dropped to like 57 years. Professors had to become taxi drivers, nurses became prostitutes, art museums sold the paintings right off the walls to anyone who would buy them. It was just Neo allistic chaos.

MAGGIE LAKE

No rule of law.

WILLIAM BROWDER

No rule of law, no. No institutions, no police. And it was very hard for almost everybody there. And in a certain way, the chaos of the 1990s, this was the period when Boris Yeltsin was president, it created this opportunity for a very small number of people to get very, very rich. And most everybody else suffered profoundly, the most profoundly. Just… nothing. There was no food, there’s no safety, there was nothing and it was hard to feel anything other than sadness and disgust for the Russian government in the way that they set up this thing for the people. And sort of everybody in Moscow and myself included, was like longing for somebody to come in and fix the situation. To take away this power from the oligarchs and bring it back to normal. That was the feeling that everybody had in Russia.

MAGGIE LAKE

Did you consider leaving when you saw that this was going on? Because, you know, it wasn’t just like, one year and then there was a solution. This went on for quite some time.

WILLIAM BROWDER

Well, I mean, my reason for being there was to be an investor. My logic as an investor was that yes, it’s terrible, but if it goes from terrible to bad, then you make a lot of money as an investor. And so, I thought that Russia was on a trajectory from terrible to bad. And it was. It kind of couldn’t stay the way it was, because it was just too terrible. It could never become like Sweden or you know, Canada. All it had to do was just, you know, go from like Nigeria to Brazil, and my securities were worth a lot more money and Russians and probably be a lot happier. And that’s what I was there for and that’s what my big bet was.

MAGGIE LAKE

So, we talked about that being your worst trade. But we’re just going to put that off on hold, because I think we can circle back at the end and discuss why it turns out to be your worst trade. Because for the moment, it’s kind of your best and worst trade because even against the backdrop of it being very dark, you’re doing very well. And so I think that takes us to your second trade, which is one of your best, and it’s very specific. In 1997 Sidanko Russian oil company. Give us the backdrop, set the scene for us. You’ve been in Russia for several years now. How did you get involved in this trade? And how successful were you at this point?

WILLIAM BROWDER

So the oil companies of Russia were trading at this unbelievable discount to the oil companies of the West. That was the basic premise. So I set up on the ground in Moscow, and I discover something even better than that, which is that most investors only had access to one or two Russian oil companies, which were the ones that were researched by the brokerage firms that were set up in Moscow, they decided to do research on the shares that had the most free float that were trading the most, because they could make most Commission’s by buying and selling those shares. But there were more than two oil companies, there were like 30 oil companies in Russia. And I saw because I was on the ground, I wasn’t reliant on anybody. I started to go around and visit them. And so I started to visit these oil companies and I come across this one Oil Company called Sidanko. And Sidanko was very similar to Lukoil. But in terms of the amount of oil they produced and all this sort of general features of it, but traded at a 90% discount per barrel of reserves to Lukoil. So Lukoil is trading at like a 99% discount to the Western oil companies. And I found something that’s 10 times cheaper than Lukoil. Why was it cheaper? Well, there was not a whole lot of free float – only 4% of the shares traded on the secondary market, 96% of it was held by one Russian oligarch. So nobody bothered to do the research. But I said, “Well, wait a second. This is not that different from Lukoil. It trades at this enormous discount.” I went and poked around the company as best as I could to see if there was some problem or some big red flag that made it trade this discount and it just didn’t make sense. And so I bought Sidanko and I think I put $11 million of my fund into Sidanko, which was a lot of money for me at the time. And then I started telling everybody about Sidanko and people said “wait a second.” So it started to rise in value. And then the most interesting thing happened, which is that BP, British Petroleum, wanted to also invest in Sidanko. And so they negotiated a deal with the majority shareholder, this Russian oligarch, to buy 10%, of Sidanko, at 10 times the price that I had invested in. And so my $11 million turned into more than $100 million, and this is at the very beginning of my career – this was like almost the very beginning of my fund. At a time when making $100 million was just like – I mean, now you read these numbers on Bloomberg, or whatever, the 100 million dollars is not a lot of money – but back then it was just the biggest amount of money ever. And it completely put me on the map financially. I had a 20% profit share of my funds, so I was gonna make $20 million of that. It made the fund the best performing fund in the world, in 1997.

MAGGIE LAKE

And it was just so crazy.

WILLIAM BROWDER

It was just so satisfying to bet big and bet right. And have it just, you know, in every different way, validate my thesis that Russia was cheap and because I was on the ground, I could find things that are even cheaper. And so I just felt so good. And my investors were so happy with me, and everyone was patting me on the back. And I was, you know, counting my winnings, and it was just all so good. And then all of a sudden, I discovered the first really dark experience that I’ve had in Russia, which is that the majority shareholder, again in Vladimir Potanin, was the guy who owned 96%, he sold 10% to BP. For some reason, he wasn’t sort of licking his lips with satisfaction about how he had made 10 times his money selling to BP and is still 86% left. Somehow it just bothered him to no end that I made all this money. And he just couldn’t get over it. And there’s this famous Russian proverb about a magic fish. And so let me just tell the story really quickly because I think it demonstrates what happened here. So the story is about – so a villager comes across this magic fish, and the magic fish jumps out of the water and says “congratulations, you found me. I will give you any wish you desire” and the villager says “you know I’m thinking about maybe a pile of gold or maybe a castle or a big ship to sail the high seas” and the fish interrupts the villager and says “There’s one caveat. Whatever I give you, I gotta give two to your neighbor.” And at this point the villager said “well that is real simple, poke one of my eyes out.” And that is because he wants his neighbor to have two of his eyes… this is a real Russian proverb.

MAGGIE LAKE

That is brutal.

WILLIAM BROWDER

And this is how Russia is. People don’t worry about their own success. They just don’t want their neighbor to be successful. And so it just bothered him profoundly that I had made all this money and so he organized a share issue in which they were going to increase the capital of the company, issue a whole bunch of shares, sell it to themselves at a huge discount to the market and effectively steal like $75 or $80 million of the $100 million that I dollars that I made. And so, this guy was a Russian oligarch, one of the biggest Russian oligarchs, one of the most powerful Russian oligarchs. So I’m sitting there, and my entire success has now been completely destroyed. He wants to take away all of the stuff. And not only that, but it would ruin my reputation, my business would probably collapse, I would fail, I’d have to leave Russia with my tail between my legs. And so I had to make a decision, “what am I going to do?” And I decided that I was going to fight him. And nobody had ever fought an oligarch before. And I didn’t really know how and so I gathered up my team and we made a war room in our conference room, we put up white paper on the wall. And I said, “we need to kind of come up with ways in which we cause this guy economic pain everyday. We need to do three things a day to cause this guy economic pain, or we haven’t had a successful day. What are some good ideas? And we sort of filled up the wall with ideas and we got to work. And the first thing I did was I went to all the other investors, who had all the other Westerners who had done business with this guy, who were doing business with this guy, and shared with them a PowerPoint presentation showing how he had just ripped us off and said, “you’re next.” And they all started calling up. These were big, big names, Soros and Harvard university endowment and all sorts of big financial institutions. They all call them up. And, and they said, “you know, you can’t do this. This is just not how things are done.” And this infuriated him. One of his underlings call me up and said, “Bill, you’re not playing by the rules.” And I said, “Well, you think I’m not playing by the rules now, wait ‘til you see what I’m going to do next.” And by the way, at this point, I had hired 16 bodyguards. I had a lead car, leg car, a sidecar, everyone fully armed, a guy with a submachine gun, sitting in my living room. You know, I was ready, you know, I was ready for whatever was going to come my way and I was not going to back down. So the next thing I did was I went to the media. And I got the Financial Times to write a big story about how he was ripping us off, and they were looking for a big oligarchic story. And so they write this story, and he becomes even more infuriated. And he holds a press conference. And he says, “Bill Browder is a terrible investor, his clients should take their money away from him immediately. He should have known I was going to do this to him.” And at this, every newspaper starts to write about it. And at the time, there was a securities regulator that hadn’t ever regulated a single securities security law. But I created such a scandal that he was forced to step in and after a couple more big articles, he canceled this diluted share issue, and I went back to being whole. And I beat an oligarch and I survived. That got me back whole financially. But secondly, it gave me a sense of confidence, in which we’ll talk about what it did to me later, ‘til I start doing this again.

MAGGIE LAKE

So you knew that doing this was life threatening? I mean, you had all these bodyguards. Did you feel at that point that it was the Russian oligarchs that were kind of poisoning the system and behaving badly? Or did you see this as a problem throughout the government, as well, as a sort of state problem?

WILLIAM BROWDER

Well, at that point in time, it was an oligarch problem exclusively. The oligarchs controlled the state, the state didn’t function the way in normal state functions, the oligarchs controlled everything. And so they were like the complete devil, ruining everything for everybody and ruining it for me. And I thought, you know, these oligarchs, you know, we’re just such sort of chest thumping alpha male on steroids characters, but actually they weren’t. When push came to shove, they were not omnipotent. And so I decided to, you know, go for another one. And that was the second trade.

MAGGIE LAKE

Well, it’s going to be your third and fourth together. Your first trade is going, which we will follow up on – good so far, but that takes a turn. Your second trade is this successful one, and your third one you’re going to do it again. Before we get to that, though, why not take that win and leave?

WILLIAM BROWDER

Well, it’s like anything else – once you’ve tasted the forbidden fruit, you want more. I thought, “if I can beat this one, I can beat another one.” And so I wanted more. I was feeling very powerful, and I guess greedy. And so I wanted to do something bigger and better and more profitable, and more dramatic.

MAGGIE LAKE

So now you’re high profile. And your third trade is your best and your worst. It’s actually the third and your fourth, because I think it’s really a turning point for you. And that is when you took on Gazprom in 2005. So you do it again, after Sidanko. And this time, your target’s Gazprom, presumably a bigger target?

WILLIAM BROWDER

So Gazprom was a much bigger target. Gazprom is the largest company in Russia, the largest oil and gas company in the world by a factor of 10. Gas in 1999 traded at a 99.7% discount to Exxon per barrel of hydrocarbon reserves. At that point in time, everybody assumed that every last cubic meter of gas and gas reserves was stolen out of the company. And so I decided to do something which had never been done before, which is a stealing analysis of Gazprom. So how do you do a stealing analysis of a Russian company? You don’t go to the management and say, “Excuse me, sir, can you tell me how much money you’re stealing?” Because they wouldn’t answer that. And they might do some other terrible things. Nor could you go to the investment banks that were set up in Moscow and ask them because they were so busy trying to get paid work from Gazprom, the last thing they wanted to do is say anything negative. And so I came up with an idea, which was to make a list of all the people I thought might know about the stealing. This included ex employees, competitors, customers, suppliers, government officials, former government officials – anyone who might have some detailed knowledge of the stealing. And I made a list of these people. And I sent an invitation to invite them to breakfast, lunch, dinner, tea, coffee, dessert. And I didn’t tell them what my agenda was in advance. I just invited them. And interestingly, like of the 40 or 45 people that I sent these invitations out to, 35 said yes. They were kind of curious, “what does this western guy want to treat me to lunch for?” And so I had my first lunch. It was with a small competitor Gazprom. And we sat down in an Italian restaurant across the River from the Kremlin. And we sat down, and I didn’t know what his response was going to be when I opened up and told him what I wanted. But we sat down and ordered and I said, “Well, you know, the reason I invited you here is, I’m interested in understanding what’s being stolen from Gazprom. Can you tell me? Do you know?” And that was like, the moment of truth, what is it gonna get up and walk away? Or what’s he going to do? And instead of getting up and walking away, the guy leans forward. And he says, “You can’t even imagine the kind of stealing that’s going on there.” And he starts just rattling off scam after scam after scam and a little notebook. And I was writing it all down and turning the page and writing some more and writing some more and, and he barely touched his meal. And we’re like, two hours and 20 minutes into it. I had another meeting I had to go to. I had to cut it short. And it turned out that the reason he was so helpful is not because he wanted to be helpful. He was just infuriated that some small group of people got to steal all that money, and he didn’t. He didn’t want them to get away with it. And so he shared with me this information and everybody else did too. And so, I had filled up two full notebooks with unbelievable data and sort of stories and anecdotes about all the stealing. So I fill out these notebooks, but the problem is that it was clear there was something gigantic going on at Gazprom – some terrible fraud. But it’s hard to for me to know what I could do about it. Because I couldn’t just go to the media because it was all hearsay, there was no proof. It’s just a bunch of rumors over lunch. I couldn’t go to court for the same reason. There’s no evidence. And so I sat there feeling like I was sitting on this unbelievable sort of treasure trove of something but not really knowing what to do with it. And I was frustrated and kind of disappointed and wishing I had some breakthrough. And then, about three weeks after the last interview, my head of research, a guy named Vadim Kleiner, is driving his car through Moscow. And it gets to a place called Pushkin Square. And Pushkin Square, the traffic snarls up really, really badly, so badly that if you’re unlucky, you could be sitting there for an hour, and if you’re lucky, 15 minutes. And as a result of these traffic jams, these young street urchin kids try to sell things to people are stuck in their cars. They’re selling cigarettes and pirated DVDs and pantyhose and all sorts of things. And this is back before the days of cell phones where you could watch or look at your phone while you’re sitting in traffic. And so some kid comes up to his window and knocks and he rolls it down. And he says “what do you got?” And the kid said “databases.” And Vadim looks at him sort of quizzically “what do you mean databases?” And the kid says he opens up, he has a dirty down parka, he opens it up and has all these folders, these translucent folders with these discs in it. Vadim points towards one of them says “What’s that?” And the kid says “the Moscow registration chamber database.” And this was the database that shows like The beneficial ownership of all Moscow based companies and something we’ve been looking for. And Vadim said, “Well, how much?”

MAGGIE LAKE

Honestly, this is crazy.

WILLIAM BROWDER

It’s insane. Vadim says “how much?” and the kid says “five bucks.” So Vadim buys the disk, comes back to the office. And he says, “Guess what, I’ve just bought the Moscow registration chamber database for five bucks.” And I said, “You’ve been ripped off, for sure.” And he said, “let’s see.” And this had been well before the days of computer viruses, so we stick this disc in the computer, and sure enough, it’s all bells and whistles: Moscow Registration Chamber Database. But the best part was, when we popped the disk out, there was a phone number on the disk where you could call for other databases. And so we call the number and we got the Russian Securities Commission database, the Customs Committee database, all sorts of other databases. And indeed, Vadim did get ripped off because the other databases were only $1. And so basically, what happened is in Russia, the guys working in the ministry – it’s the most bureaucratic country in the world – they’re not being paid anything. And so they’re putting up all this information for sale. So we bought all the databases, we then compare those databases with all these anecdotes that we had heard over lunch, dinner, tea, coffee, dessert. And we came up with the most remarkable economic discovery I’ve ever seen in my entire life, which is that between 1996-1999, the management of Gazprom had stolen oil and gas reserves equal to the size of Kuwait. So, remember, there was a war fought over oil and gas reserves the size of Kuwait? In Kuwait, the first Gulf War – and we just discovered a similar type of crime at Gazprom. So that was the first most impressive economic statistic I’ve ever seen. The second most impressive economic statistic is a gas from the reserves the size of Kuwait, only represented 9.65% of Gazprom’s total reserves. In other words, 91% of the company is still there. Now, this is a company that’s trading at a 99.7% discount because everybody is assuming everything has been stolen. And we can now prove effectively, scientifically, that almost everything is still there. So as an investor, what do you do with that? You backup the truck. I bought as much Gazprom as I could get my hands on and I made it my single largest investment in the fund. I then did something very interesting, which is that instead of just leaving it as it is and waiting for the world to discover this, I shared it with the Financial Times and the Wall Street Journal and Businessweek and New York Times. They each wrote a story on the back of those stories, and the Russian press wrote stories in the back of those stories. Then the parliament began debating whether it was a good thing or bad thing for these assets to be stolen – more stories on the back of that. The management hired an accounting firm PricewaterhouseCoopers, to write a report saying it was a good thing for these assets to be stolen. More stories. And by the time we were all done, there were like 500 stories. And then Vladimir Putin – this is in 2001, he was newly sort of elected president – he steps into the fray and he fires the CEO who is doing all the stealing and replaces him with a new guy whose job it was not to steal assets. The guy could steal everything else, just not assets. But just making the announcement that no more assets were going to leave the balance sheet of Gazprom, the share price doubled, and then it doubled again. And it doubled again, and it doubled again and doubled again. And it kept on doubling and doubling until the share price was up 100 times from when I first started this whole campaign. 100 times this is not some. This was my biggest investment. It’s not some micro cap, you know, venture capital thing. This is the largest company in Russia, 100 times. I made billions of dollars. I mean, it was just the most unbelievable trade of all trades. I mean, not just my best trade, but anybody’s best trade, it was just unbelievable. But there’s a bad part of the story, which is either my third or fourth, depending on how you want to define it.

MAGGIE LAKE

It’s the fourth. Because it’s like the flip side of this. By the way, it’s very often on this podcast that people’s best trait also turns out to be their worst trait or vice versa. So you’re sitting on billions? Is it realized gains? Or is it paper gains at this point?

WILLIAM BROWDER

Well, so here’s what happened. The people who were doing all the stealing, that I was exposing, and by the way, I kept on exposing the stealing, not just that year but after the new guy came in. And the people who were doing the stealing started getting really angry with me. And so in November of 2005, after I’ve been living there for 10 years, and I was now sitting on a fund worth four and a half billion dollars, I’m flying back from London to Moscow from a weekend trip abroad. And I’m arrested at Sheremetyevo Airport. They arrest me, they put me in the detention center in the airport, they keep you there overnight – 15 hours – and then they deport me the next day and declare me a threat to national security. And now it’s a pretty terrible thing to be a specialist on Russia and be kicked out of your own country. But I understood that the Russians could go a lot further than that. And so I looked around and said, “what else could they do to me?” And they could arrest my people, and they could seize my assets. And so what did I do? I evacuated my entire staff and their dependents. And then once they were safely out, we quickly and quietly liquidated everything we held in Russia. And so it went from unrealized to realize gains. We got all of our money out and we got it out safely. They didn’t get it. So from a financial perspective, this was the best trade and it was a realized trade. But it was the non-financial stuff that happened next, which is where the nightmare is. So 18 months after I was expelled, the police raid my office in Moscow. And they raid the office of an American law firm I use and they’re looking specifically for the stamp seals and certificates for investment holding companies. They find them at the law firms office, they seize them, and the next thing I know, we no longer own our investment holding companies. They’ve been transferred to a guy convicted of manslaughter. And I was really worried about this, not for financial reasons, but if the police are working with criminals who steal companies, what else are they going to be doing? I thought I’d be arrested someday when I’m walking through Frankfurt airport. So I go out and hire the smartest lawyer I know, a young man named Sergei Magnitsky. I asked him to investigate and stop whatever’s going on. Sergei goes out, he investigates and he comes back and he says, “I figured out what they were trying to do. First they were trying to steal your money. They didn’t succeed. However, the second part of their scam they did succeed.” And the second part of the scam was when we were selling everything, in that particular year, we declared a profit of a billion dollars. And we paid $230 million of capital gains tax to the Russian government. What Sergei had learned was that the people who stole our companies went back to the tax authorities and they filed an amended tax return and they said “this $230 million was paid in error.” And on the 23rd of December 2007, two days before Christmas, they asked for a $230 million tax refund – the largest tax refund in Russian history, and it was approved and paid out the next day. Sergei and I were convinced it was a rogue operation, and that if Putin and the guys at the top knew about this, they would, they would go and stop it and prosecute the bad guys. And so we filed criminal complaints went to the media and Sergei testified against the officials involved, but instead of arresting the people who did the scam, the people who Sergei testified against, arrested him. They put him in pretrial detention. They tortured him for 358 days. And they murdered him in Russian police custody on November 16, 2009 – 13 years ago. So that, by far, was the worst thing that’s ever happened. I mean, everything else was all fun and games – whatever problems we had were virtual. But now guy who is my lawyer, my friend, was murdered in the most horrific way after being tortured for 358 days in prison, for basically being my lawyer. And since his murder, I’ve made it my life’s work to go after the people who killed him. And I’ve given up my life as a fund manager, and I’ve devoted all of my time all of my resources and all my energies going after the people who killed Sergei to make sure they face justice. And that’s led to all sorts of things, including the passage of a piece of legislation called the Magnitsky Act, named after my lawyer Sergei Magnitsky, which freezes the assets and bans the visas of people who killed him and people who do similar types of crimes. The Magnitsky Act was passed in the United States in 2012 and it now exists in 34 countries, including Canada, the United Kingdom, the European Union, Australia, and we’ve also gone after the money that they stole. We’ve investigated for nearly 13 years, the money laundering component. And wherever we find it, we report it to the law enforcement authorities of different countries. And there’s now freezing orders in place in a number of countries going after the money. And by looking at all this stuff, by digging into the stuff, we’ve discovered much bigger crimes then just the crime committed against us. And we really, you know, sort of very unlucky by being victimized, have now seen the true nature and the exact nature of the Putin regime, which is a criminal organization set up to steal money and kill people that stand in the way. And they’ve done a lot of killing and a lot of stealing since they got started.

MAGGIE LAKE

It’s gonna get hard for us, for anyone who hears that story – and we’ve spoken about it before – to wrap your head around the sort of magnitude of that. But for you personally, I know how painful it was to feel responsible – I mean, you can hear it in your voice – for what happened. At the time, the way you describe, you’re dealing with the oligarchs… it was difficult, people were stealing, it was chaos. There were criminality,, but it sounds like you did not expect this, you did not expect them to do this.

WILLIAM BROWDER

No so basically went from this highly disorganized crime, to highly organized crime, organized under the auspices of the President of the country. And nobody is immune from the organized crime that exists in the Putin regime. And it’s just truly pernicious evil, and murderous. Sergei’s story is only unique in one respect, which is that I’ve been going around the world telling it to anyone who will listen. I’ve written two books about it. I’ve gone on hundreds, if not thousands of news shows and lectures and podcasts, telling the story. I’ve met with government officials and politicians in most every country. Everybody knows his story. But it’s not unique. His story is just one of hundreds of thousands of stories of hostage taking, violence, of death, of torture, to steal money. And the really sad part about it is I’ve been telling the story trying to use this story as a way of waking people up to what Putin is really all about. And nobody wanted to really hear it. I mean, yes, they did in the sense that they passed the Magnitsky Act, but so many governments just wanted to continue to treat Putin as if he was a normal head of state. And continue to buy gas from Russia, to go to the World Cup, to take Russian investment and in deals in the West. And in doing so, and looking the other way, as Putin did this type of crime and many other very much more visible crimes like invading Georgia, taking Crimea, bombing Syria – we basically set the framework and the ground to give him the encouragement, effectively, to do what he’s doing in Ukraine right now. And that’s the really tragic part of this whole story. But I want to circle back, if we could, to the first trade, going to Russia. Because it didn’t make sense when we first started the conversation why that was a bad trade. But people ask me, and they say, “what would you have done differently, Bill?” And my answer is that once I got locked into the whole situation in Russia, you know, seeing the corruption, I wouldn’t have stopped fighting the corruption. When we discovered the crime, I wouldn’t have not exposed the crime. When Sergei was killed, I wouldn’t have not fought for justice. But the one thing that I would have not done is if I could have done it all over again – when I graduated from Stanford, I could have stayed in California where, who knows, maybe I’d be much richer right now and nobody would be trying to kill me and Sergei Magnitsky would be still alive, and I’d have a pleasant and gentle life dealing with people where the worst thing that happens is you disagree with each other about a marketing plan or something. But instead, Sergei was killed, the other people had been killed as a result of this story. They’ve tried killing other lawyers that worked for us. They tried poisoning one of my Russian allies. I mean, it’s just the most horrific thing. And I would gladly not have done any of it and not made any of the money if I could have somehow if I could somehow have…

MAGGIE LAKE

avoided that? That’s the hard question. I was going to ask you, when you look back at this, do you think that you were lured by the money? Did you make a deal with the devil? Because there was so much money involved? I mean, yes, you were flagging corruption, but you were making a lot of money off it. Do you think that that blinded you to the danger?

WILLIAM BROWDER

No, I think that once I saw the corruption, it wasn’t a matter of money or not money. I mean, money was, you know, it’s my responsibility looking after my clients. My reason for challenging the corruption was that it was just so horrible. It was unfair, injust, and disgusting. And I just couldn’t do nothing about it. And that’s just who I am. I just couldn’t sit there and look the other way and be effectively looking the other way and supporting it and being part of it. I just couldn’t do that.

MAGGIE LAKE

Or you could have left, right? You were there for a really long time. And you made good trades, you could have left at any point said “this is too much.”

WILLIAM BROWDER

Once you get to a place like that – I had responsibility for thousands of clients. And I couldn’t just leave. I mean, that didn’t feel like an option to me.

MAGGIE LAKE

Did you ever meet Putin in person?

WILLIAM BROWDER

I’ve never met him. I’ve never met him or had any kind of conversation with him. But I think we both know each other well, now. He has been chasing me all around the world trying to have me arrested through Interpol, and extradition requests. And he’s muttering my name, to this day, by the way. And at the Helsinki summit with Trump he asked Trump to hand me over. His General Prosecutor after that said, “Bill Browder shouldn’t sleep peacefully at night.” I mean, these are people that are really bad people, you don’t really want to be on the other side of, who are furious with me. And they’re furious because I went after the thing that they value most, which is their money, and they’re ready to kill for money and to have somebody try to take that away from them is the most unforgivable sin in their minds.

MAGGIE LAKE

And we’ve seen them reach across into England, into many countries, and, you know, mysterious things have happened. How do you live with that pressure that they’re still after you?

WILLIAM BROWDER

Well, I’ve been living with it for almost 13 years now. And you kind of find ways to adjust to it. I mean, I guess some people would have, I don’t know, imploded, but I found a way. I’ve got to be careful, I have to take precautions in a lot of different ways, but I’ve also found a way to live with it. In a certain way, you know, I look at the Ukrainians right now, and I wonder how people can carry on trying to have normal lives and Kyiv when a bomb could drop on them at any moment. Everybody just takes their circumstances and tries to do the best they can.

MAGGIE LAKE

Do you feel like people see Putin the way you do now? And this has been a seminal event, the war in Ukraine, do you feel like people finally understand the message you’ve been trying to send?

WILLIAM BROWDER

They finally do. Too late, but they do. I’m not in the wilderness anymore. You know, people used to really like not like me. I go to Davos, the World Economic Forum, and Western business people wouldn’t invite me to their lunches and dinners because they didn’t want to mess up plans to make business with Russian oligarchs. Now, I think I’m okay. People are happy to see me now, because everybody says, “You were right.”

MAGGIE LAKE

You feel it feels vindicated? What do you think happens now? We’re seeing developments where Ukraine apparently looks like they’re pushing back. There’s reports of the soldiers retreating from Russia, but it’s hard to know what’s actually happening on the ground in the fog of war. But what do you make of it? What do you think that means for Putin?

WILLIAM BROWDER

Well, I think it’s amazing and great. And it’s hugely boosting the morale of Ukraine. It’s boosting the morale of the West, who need to continue to support Ukraine. It’s hurting the morale dramatically of Russians. But I should caution everybody, that this is a very small proportion of the territory that Russians have taken that’s been reclaimed, it’s like less than 10%. And Russia has a huge amount of resources, troops in and malicious intent. And I know Putin real well. And he doesn’t take humiliation well. He doesn’t do humiliation well. And he will escalate. And so we have to pat ourselves on the back and root for the Ukrainians and feel good about it, but understand that this is a long war. I doubt profoundly that this is the end of the war. It’d be lovely and amazing if it was, but I think this is just a good blip in the right direction. This is going to carry on, unfortunately.

MAGGIE LAKE

Is this problem a Putin problem? Or do you think it runs deeper into the Russian psyche? So say Putin goes, somehow – is there any chance the person who replaces him is a new start for Russia? Or could it be worse?

WILLIAM BROWDER

I don’t think it’d be worse. It all depends on how Putin goes. If he is eliminated in a popular uprising, then Alexei Navalny can become the next president of Russia. If he were to die in his sleep or get taken out in a palace coup, then it could just be another guy just like Putin. I don’t think there’s anyone worse than Putin. I think he’s as bad as you get and we shouldn’t worry about that. But it really depends very much. But one thing I can say is if the Ukrainians do succeed in getting rid of Russian troops in their territory, Putin will be gone.