Dealing with individuals sanctioned by the US can be hazardous.
This is the lesson Vladimir Putin and his oligarch friends are discovering anew since the Russian invasion of Ukraine and swift and crippling sanctions imposed against them by the US, UK and EU.
During the recent Franschhoek Literary Festival I interviewed, via video link, the pioneer of the “freezing order” against the Moscow elite, Bill Browder, author of the recently published best-selling book of the same name on the topic.
As has become well known about Browder, Putin’s modern nemesis in the West (before Volodymyr Zelensky assumed the mantle on the battlefield), he took on Putin after his lawyer, Sergei Magnitsky, was murdered in his Moscow prison cell in November 2009. Magnitsky had been responsible for demanding legal redress from the Russian government for the theft of $230m from the taxes paid by Browder’s company to the Russian government. In other words, a shady network of corrupt Russian officials had effectively stolen from its own fiscus. When Magnitsky got close to unravelling this crime and fingering the officials, he was murdered.
In his campaign to avenge the murder and sanction the perpetrators, Browder embarked on an international campaign. His “magnificent obsession” has resulted in the enactment of 33 “Magnitsky acts” across the world to seize the assets, after first freezing them, of those responsible for the lawyer’s death. Since its first enactment in the US, it has since been widened to capture in its net international human rights perpetrators.
Browder’s virtual appearance in Franschhoek was for him a matter of regret since he regards this country with deep affection. But he declines to visit SA in person (despite owning a home in Camps Bay, Cape Town) in view of the ANC government’s close ties to the Kremlin. Nevertheless, distance did not diminish the impact of his conversation. He held the audience riveted with his 45-minute talk.
However, it was in the Q&A session which followed our interview that Browder answered a question which might well send shivers down the spine of the ANC and its fundraising arm at Luthuli House.
Adriaan Basson, editor-in-chief of News24, asked Browder about the links between the ANC and its new cash cow, United Manganese of Kalahari (UMK), 49% of which is owned by Viktor Vekselberg, a Putin crony and major Russian oligarch. Chancellor House Trust, of which the ANC is a major beneficiary, owns a big chunk of the remainder of the company. The manganese miner is today the biggest single funder of the ANC, directly through overt donations and indirectly via the dividends that flow from it to Chancellor House.
Vekselberg has been sanctioned by the US government since the war in Ukraine commenced and global assets in which he owns more than 50% will in turn be frozen by the Americans.
Browder was, until the question from Basson, unaware of the link between the Russian oligarch and the ANC, but he certainly knew all about Vekselberg. He responded that he had no doubt the funding scheme was the likely explanation for “South Africa’s immoral support of Russia at a time of war”.
Shortly before the Browder interview investigative news site amaBhungane lifted the hood on UMK and the ANC, and illustrated that the former funded the party by far more than the Chancellor House-declared R15m donation to it (the largest single donation the ANC received in 2021), while UMK directly contributed R5m. It did this by “splitting funds” through a number of smaller entities. This, amaBhungane calculated, meant UMK effectively donated R45m to the party in the reporting period covering the first three quarters of 2021.
On Monday the Independent Electoral Commission (IEC) released its report on party funding for the final quarter of last year. It revealed that its sole donor for the period was, again, Vekselberg-Chancellor House company UMK. This would suggest the amaBhungane figure would now read R55m.
UMK’s shareholding is enormously opaque, but there is little doubt the sanctioned Vekselberg is at the centre of its web.
Browder in turn undertook to cast his unrelenting gaze on the ties between the Russian oligarch and the ANC. Given any US dollar transaction which just touches the US for a split second triggers American jurisdiction — and any company trading in dollars does just that — it is likely the US administration will also take a closer look at UMK. Especially since metals such as manganese are traded in greenbacks.
Browder’s 12-year quest to track and financially cripple the killers of his lawyer has alchemised into the international sanctions now threatening the Russian economy and its enablers in the outside world.
He mentioned during our conversation that Putin has “no reverse gear”. Neither does Browder. If I were relying on funding my party from a company so closely connected to a sanctioned Russian oligarch, I would not sleep easily.
Tony Leon, a former leader of the opposition, now chairs Resolve Communications. @TonyLeonSA