Bill Browder on Putin, sanctions and how to end the war

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International sanctions imposed on Russian President Vladimir Putin have frozen his personal assets. Or at least the assets he seems to own.

Sanctions against Russian oligarchs in Putin’s orbit are perhaps more effective. This is not necessarily because these well-connected billionaires traveling the world could put pressure on the president to change the course of the war in Ukraine. According to William F. Browder, this is because much of their wealth is held on behalf of Mr. Putin.

Mr Browder, once a major investor in Russia, has become one of the Kremlin’s biggest enemies. Russia has tried several times to force Interpol to issue arrest warrants against him. And he is such a thorn in Mr Putin’s side that the Russian president highlighted him by name during his first official summit with President Donald Trump.

What did he do to attract such anger? Mr. Browder managed one of the largest hedge funds in Russia in the late 1990s and early 2000s. But his public battles against corporate corruption eventually led to his expulsion from Russia in 2005 as a “threat to national security.”

In 2009, his tax lawyer, Sergei Magnitsky, who is investigating money laundering by the government, was arrested and later died in a Moscow prison nearly a year later, at the age of 37. death of a lawyer with sanctions. At Mr Browder’s insistence, such laws have been passed around the world.

This makes Mr Browder very well aware of the effects of sanctions on Russia’s political and business elite, not least Mr Putin. Now that world leaders are imposing round after round sanctions on Russia for its invasion of Ukraine, he offers a unique perspective on how these actions could affect Mr Putin’s calculations.

Prior to the release of his new book, Freezing Order, DealBook spoke with Mr. Browder about how to end the war in Ukraine, the influence the oligarchs are exerting, and what really motivates Mr. Putin. The conversation has been edited and shortened.

What do you think is Mr. Putin’s finale at the moment?

Putin is a dictator. One of the great advantages of a dictatorship is that it can steal as much money as it wants. And he chooses to steal a lot.

After a while, in a country where people think they are in a democracy, they begin to see that they are hungry and not cared for in hospitals and their children are not educated. They start to get angry and get angry at the person in charge. So from time to time, the person in charge has to do something to make people less angry with him.

The purpose of these wars is to make him afraid of being overthrown. So, the best way to do this is to get everyone around the leader. So when you talk about the final game, there is no end. Only he remains in power.

As Mr. Putin’s longtime target – and someone I imagine has tried to better understand what motivates him – what do you think he thinks?

The problem is that there are some psychological characteristics that feed on this whole thing that makes it particularly toxic. The world he lives in is like a prison yard. This is a world where everyone looks at each other aggressively and everyone has to show strength to each other. You know, the most powerful man in a yard has to be the meanest man to keep his power.

So his idea was just to destroy Ukraine and then hit him in the chest and show everyone how strong he is. But his misjudgment of how effectively Ukrainians are fighting made him look stupid. And for prison people, this is the worst thing that can happen.

Do you think he understands that?

Of course.

Do you think everyone around him is a “yes” man?

It’s not just the people around him. These are the people of the West. The Ukrainians showed him great disrespect, successfully responding. So, for example, the war crimes committed are not accidental. That’s part of his thing.

He must show that he and his people and everyone around him are so evil. They will just keep escalating and raising rates and they don’t care what people think of them. In fact, they want people to think these bad things about them because it makes them look more brutal.

Given what you’re saying, what’s a reasonable way to think about the end of the game?

There is no reasonable way to end this thing. There is only one unreasonable way.

Either he eventually conquers Ukraine and then moves to the Baltic countries to challenge us to NATO – or he is defeated by Ukraine and then the Russian people overthrow him because he was the weak man who could not win Ukraine.

How does it interfere with these two options?

I think each of these options has a 15 percent chance.

What is the other 70 percent probability?

That he, the Ukrainians, and all of us are trapped in this quiet boiling. It will not be at the same level of horror as it is now, but in this quiet smoldering conflict that just goes on and on and on for years.

Do you think the oligarchs really have an influence on him? Do you think that sanctioning them is effective?

It is like a cure for a certain type of disease. The medicine may have a greater effect depending on when you are taking the medicine. So, if we had sanctioned the pre-invasion of the oligarchs and done it with our hands locked with our allies, it would have had a much greater effect on his actions than it does now.

That doesn’t mean we shouldn’t do it now, but he bet there will be no serious sanctions because he has done a lot of terrible things in the last 20 years and there have been no serious sanctions before.

But does Mr. Putin care what the oligarchs think?

His? No.

But it is extremely important to sanction all oligarchs for a reason other than hoping that the oligarchs will overthrow him. The oligarchs hold his money. So when you see a $ 20 billion oligarch, 10 billion of it belongs to Putin. He can’t keep money in his name.

So, he has to give it to someone who actually has the financial means to act – to be the owner of those funds. When we say we want to sanction Putin, the only effective way to do that is to sanction the oligarchs. And the reason is neither to make him change his mind, nor to make the oligarchs overthrow him – it is mainly to prevent him from using this money to wage this war in the future.

So these oligarchs don’t call him and say, “You have to cut this?”

The oligarchs could not do that. Any oligarch who does this will be immediately arrested, impoverished and killed.

What do you think American companies should do? What do you think of those who worry that if they leave, they will never be able to return?

In the first place, continuing business in Russia after this invasion was equivalent to continuing business in Nazi Germany when Hitler began persecuting Jews. It’s the same thing.

Every business has a moral obligation to get out of Russia, no matter what the cost. I don’t think anyone should worry about their return, because everyone will be welcome back in the post-Putin regime. And under Putin, I don’t think anyone should even want to come back.

What about China? What impact does it have at the moment?

The only loophole in this whole thing is China, right? China was very clear that it would not join the rest of the world in challenging or punishing Putin for what he was doing. I think China needs to be careful.

Why? Does China still have leverage over the West?

Well, the answer is that the United States is likely to be less likely to sanction China before consumers themselves sanction China.

So you think consumers will step in to punish China for supporting Russia?

I can easily imagine a movement in which every American consumer looks at the label. After all, consumers, whether organized by government or not, have as much power as governments – or more.

Do you think that Mr. Putin still has people watching you?

The way Russia works is that I don’t think he spends much time with me, but he ordered his government to persecute Bill Browder 10 years ago in every way possible. Until the order is revoked, there are people whose job it is to persecute me, no matter what happens in the world. And they keep following me.

What do you think? Will sanctions against oligarchs put pressure on Putin to end the war? Let us know: dealbook@nytimes.com.

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