US risks angering Russia by publishing blacklist

Diplomatic friction as Washington names Russian officials banned over Magnitsky affair

Sergei Magnitsky: The lawyer died in custody after helping to expose a large tax scam

Washington risked reopening a diplomatic rift with Moscow following the publication of a blacklist of Russian officials who are banned from the United States because of their alleged involvement in the death in custody of the whistleblowing lawyer Sergei Magnitsky.

Earlier in the day Moscow had warned that any decision to go ahead and release the list could damage relations between the two countries. Washington passed legislation banning the officials in December but had so far put off making the list public until now.

According to the list released last night on the Treasury’s website there are 18 officials who have been named. It was compiled in the wake of the arrest and death in custody of Mr Magnitsky, a father of two and Moscow-based lawyer who helped expose a multi-million dollar tax scam that was allegedly carried out by criminal underworld figures allied with Russian officials and police officers.

Among those included on the blacklist is Pavel Karpov, a former interior ministry police officer who is currently suing William Browder in the UK courts for libel. Mr Browder, a millionaire hedge fund manager and staunch critic of official corruption inside Russia, employed Mr Magnitsky to uncover a $230million tax scam against a series of subsidiaries that were once owned by his company Hermitage capital.

After publicly naming a number of officials Mr Magnistky was arrested for tax evasion and died nine months later in prison. His family, rights groups and Russian’s own human rights investigation body say there was evidence he was beaten in custody and denied vital medication.

Mr Browder has named Mr Karpov as one of the officials behind the scam. However the former detective has vehemently denied any involvement and has launched a libel case against him in the High Court.

Other Russian police officers named on the American list include Mr Karpov’s once bosses Artem Kuznetsov and Oleg Silchenko – both of whom have also denied involvement in the scam.

Olga Stepanova, a former tax official, is also named on the list. Her department was one of two Moscow tax offices who signed off on a fraudulent tax rebate in just 24 hours on Christmas Eve 2008. With the help Alexander Perepilichnyy, another whistle blower, Mr Browder’s investigators helped uncover how Mrs Stepanova and her divorcee husband have become exceptionally wealthy in the wake of the scam. The Stepanovs, however, insist that their money was gleaned through entirely legitimate means.

Mr Perepilichnyy, who was helping Swiss investigators uncover how much of the money was fraudulently laundered, was found dead outside his Surrey home in yet to be explained circumstances.

Russia has long promised that any blacklist from the US side would be met with a tit-for-tat list of US citizens to be banned from Russia

“We have said many times that this is all extremely destructive for bilateral relations, and we would never have initiated anything similar, we have enough problems in our relations as it is,” the Deputy Foreign Minister Sergei Ryabkov said yesterday. “But given that the American side, both the administration and Congress, have decided to take a different path, we don’t have any option but to respond. Mr Ryabkov said that the response would be “equal and balanced”.

These are likely to include people allegedly implicated in the human rights abuses of Russian citizens, such as the US agents who arrested Viktor Bout on charges of weapons smuggling, as well as other officials responsible for CIA secret prisons and the Guantanamo Bay detention facility. However, banning US officials from Russia does not quite have the same resonance as a ban on US property and assets for Russian officials, many of whom have stashed money abroad in recent years. Aware of this, Moscow also introduced a ban on the adoption of Russian children by US citizens, a move that produced outcry among the liberal opposition as well as many ordinary Russians.