The Browder Affair and the Death of Russian Economic Reform 2/3

 by Nomad

Part One of this series

In Part two, we pick up the story of the crusader investor, William Browder. As an activist shareholder whose business model was based on exposing corruption, Browder was about to meet his Waterloo with the Russian global energy giant, Gazprom.

The Payoff and the Payout

William Browder's mission to expose and clean up corruption within Russian corporations was not based on any altruistic motives. On the contrary, it was an application of basic capitalist principles. simply a way of increasing the value of the companies in which he owned stock.

A corporation cleared of corruption was bound to be more efficient and in practical terms, more accountable to its shareholders. Furthermore, it was bound to be more profitable.

However when it came to Gazprom, Russia's oil giant, that practical idea was to hit a snag. When Browder's investment fund  Hermitage Capital Management (along with other minority shareholders) launched its anti-corruption campaign, it would turn out to be, in fact, an indictment against the whole Russian way of doing business.

A Washington Post article in December 2000 reports the growing concern by foreign shareholders. Accountability was, they discovered, an illusion.

The huge natural gas monopoly Gazprom, one of Russia's largest enterprises, has transferred hundreds of millions of dollars in assets outside the company in recent years while signing lucrative deals with a firm largely owned by Gazprom's current and former directors, executives and their relatives, documents show.

(The article- though predictably complex- lays out a pretty good case for widespread corporate abuse that would have made Enron executives blush.)

Destiny in the Making: President Obama Made History 25 years Ago Today

by Nomad

A quarter of a century ago, one soft-spoken student with a sense of destiny took his first steps into the public spotlight. His name was Barack Obama. 

Twenty five years ago, Barack Obama was elected the Harvard Law Review's first black president. Here is the New York Times announcement.

(Hat-tip to my long lost cousin, Angel.)

Uninsured Texas and ObamaCare: Republicans in Washington Ignore Realities Back Home

by Nomad

Nearly a million Texans have signed up for Obamacare since November surpassing all expectations. Although Texas is the uninsured capital of the nation, Texas Republicans in Washington are leading the crusade to gut affordable health care for all Americans.

Three days ago, the House of Representatives under Republican control, passed a bill attempting to shut down the Affordable Care Act. It was an exercise in futility and was the 56th vote to repeal the controversial healthcare reform. Even in the unlikely event, it passes the Senate, President Obama stands poised with his veto pen in hand to kill the legislation.

Meanwhile, back in Texas, the Republican heartland, it was a completely different story. Since open enrollment began on Nov. 15, nearly a million Texans have signed up.

According to an article in the Dallas Morning Observer, this year's enrollment figures are up by a third compared to last year's statewide enrollment campaign. Marjorie Petty, Texas regional director of the U.S. Department of Health and Human Services. is quoted as saying.

"This is the second year, and I think we’ve surpassed the numbers that were expected"

Turkish Court Delivers Surprising Verdict to Negligent Gynecologist

by Nomad

After a gynecologist  at a private hospital in Istanbul  failed to successfully perform tubal ligation,  the Turkish courts have handed down a surprising verdict. The doctor has been ordered "to pay all expenses for a child, born after the failed operation, until it reaches adulthood."

Back in 2008, a 37-year-old woman, (identified only by the initials S.I,) told her doctor that she and her husband did want any more children. At that time she was carrying her second child. The physician advised her that, following the birth, he would conduct a tubal ligation operation. Following the operation, that seemed to be the end of the story.
However, a year later, much to the woman's dismay, she learned that, she was once again pregnant despite the sterilization.

The Browder Affair and the Death of Russian Economic Reform 1/3

by Nomad

Here's a three-part post on the investor who led a crusade to clean up corrupt newly-privatized companies in Russia. The Browder affair ended up leading to an international crisis, the death of one man, another man in fear for his life. 

Meet William Browder, once the head of a London-based investment fund called  Hermitage Capital Management. In his prime, Browder became the poster child for a new kind of investor, one that was ready to seize the moment and jump into the emerging Russian market.  At one time, it was considered where bold investors went.

Today, Browder is  reportedly in fear of being kidnapped by Russian criminal syndicates working with the Kremlin. His story may sound like a thriller novel but it also serves as a warning to any foreign investor thinking about doing business in Russia. 

The Backstory

The story William Browder, it has been said, reads like a real-life LeCarre novel. It is, in fact, much more than that. In many ways, the Browder case reflects everything that went wrong with the hope and promise of Russia in the post-Soviet era. 

Browder is, without question, a complex character. It's in his genes. He is the grandson of Wichita-born Earl Browder. (Another biography made for film) Earl was certainly a man of strong political beliefs when to be a Communist was a dangerous thing to be.

During World War I Browder served time in federal prison as a conscientious objector to conscription and the war. Later he became a union organizer and later in 1927 went to Moscow, married a Russian woman named Raissa. Afterward, upon his return to the US, Earl became the head of the Communist Party in the United States.

Around 1933, Earl was already warning.

"There is little doubt that Hitler will rearm Germany and, with the help of the Western capitalist powers, unleash war against the Soviet Union."

Felix Browder, Earl's son, and father of the subject of this story became a noted Princeton mathematician.
From those roots, Earl's grandson, William Browder, drew his impeccable credentials as a hybrid communist-capitalist for the post-Soviet age.