CHINA RAILWAY CRASH

A number of days ago a rail crash happened in China when two Chinese high speed trains collided with each other.  Around forty people were killed and many more have been injured.

The crash has provoked a spate of articles suggesting that the crash is somehow symptomatic of problems within China and that it shows the extent of corruption, inefficiency and lack of accountability in China.  Several commentators notably Isabel Hilton and Will Hutton have claimed that the accident serves as an indicator that unless China carries out “reforms” (code for remodelling itself on western lines) then it is heading for collapse.

I find this sort of commentary offensive.  Accidents happen in every country.  They are an unavoidable reality of modern life.  In recent years the US has had to struggle with the oil rig disaster in the Gulf of Mexico and Japan with the crisis at the Fukushima nuclear power plant.  Britain in the 1990s experienced major disasters on its railway system and its ferries.  There have been many other disasters in many other places. Indeed disasters are so commonplace that more often than not they scarcely get reported outside the country where they happen.  There has for example just been an almost entirely unreported disaster in a coalmine in the Ukraine in which over a score of people have died.

What happened in China was a tragedy.  It is a heartless and cruel abuse of the victims and their families to use this tragedy to score political and ideological points.

SEQUEL TO MAGNITSKY POST

No sooner had I finished my long post about the Magnitsky affair than the US government announced that it had imposed visa bans on around sixty Russian officials it alleges were involved in his death.  The news article in the International Herald Tribune in which I read this announcement referred to Magnitsky as a “whistle blower”, which in effect says that the allegations he was making are true even though as I have said they have never been proved.

The announcement of the visa bans has provoked predictable protests in Russia.  The Russian authorities have correctly pointed out that at a time when legal proceedings are ongoing and nothing has yet been decided such bans are not only premature but straightforward interference in the Russian court process.  Of course the US government will pay no attention, just as European governments and parliaments pay no attention when they issue ringing declarations about the guilt or innocence of particular Russian citizens whose court cases are underway.

MEDDLING IN RUSSIAN COURT CASES PART III – MAGNITSKY

Continuing my discussion of Russian court cases, the second case that has attracted massive international attention is that of the lawyer Sergei Magnitsky.

It should be said at the outset that the Magnitsky case presents problems that the Khodorkovsky case does not.  This is because a large number of allegations have been made in this case that have never been properly tested or shown to be either true or untrue.  It is therefore a much more difficult case in which to come to any definite conclusions.

The essential facts are these.  Sergei Magnitsky was a Russian lawyer working for a US law firm but based in Moscow.  He was the lawyer and auditor of a western investment fund known as Hermitage Capital that was investing in Russia.  At some point the Russian authorities launched an investigation of Hermitage Capital alleging that it had evaded payment of taxes.  This led to a police raid of Hermitage Capital’s offices in Moscow in 2007.  As Hermitage Capital’s auditor Sergei Magnitsky was in the frame and he in turn was arrested in 2008 and held in detention in a Moscow prison whilst the case was being investigated and prepared for trial. 

I ought to say that though it would be unusual in Britain for someone in Magnitsky’s position to be denied bail it would not be a foregone conclusion that he would be granted bail given the seriousness of the charges against him and possible fears that because of Hermitage Capital’s international connections he might abscond abroad.  In the United States, which has a tougher system than Britain’s, I think it unlikely that someone in Magnitsky’s position would be granted bail or would be treated more leniently than Magnitsky was treated in Russia.

The actual CEO of Hermitage Capital is an American called Bill Browder who was at this time outside the country and was therefore beyond the reach of the Russian authorities.  As I will try to show in this post it is he rather than Magnitsky who in my opinion is the true central character of this story. 

The response of Browder and Magnitsky to the Russian authorities’ investigation of Hermitage Capital was to allege that Hermitage Capital was the victim of a corporate raid instigated by the Russian mafia and carried out by corrupt police officials in their pay.  The intention supposedly was to seize various companies belonging to Hermitage Capital and to use them to perpetrate a tax fraud.  In other words Browder and Magnitsky were admitting that a tax fraud had been committed through companies that Hermitage Capital owned but despite their own role in Hermitage Capital as respectively its CEO and auditor were claiming to be innocent of it.  Instead they were saying that the fraud was being carried out at least in part by the very same police officers who were investigating them.

It is important to say that no alllegation made by any party in this affair has so far been proved to be true.  No Russian court has found Browder, Magnitsky or Hermitage Capital guilty of tax evasion since the Russian authorities have never brought the case to trial.  The latest indications (which I will discuss below) are that the case against Hermitage Capital is going to be dropped.  As for Browder’s and Magnitsky’s allegations, these too contrary to what is being repeatedly said by Browder, by the western media and on the internet (for example in Magnitsky’s Wikipedia entry) have also never been proved to be true. I have to say that to me at least they seem farfetched.  I wonder whether if they had been made in any other country they would have been taken so seriously.  No western commentator so far as I know has ever considered the possibility that they might have been made as a tactic to smear the investigators and discredit the police investigation.

The investigation of Hermitage Capital, the raid on its offices and the allegations by and against it caused a furore. This was in large measure due to a noisy publicity campaign against the Russian authorities orchestrated by Browder from abroad. However what has raised this affair to the level of an international scandal is that after spending a year in prison in pre trial detention Magnitsky was found dead in his cell. The outcry has been deafening with the European Parliament talking of imposing a travel ban on Russian officials involved in the case, various other European parliaments including especially the Dutch parliament passing resolutions about it and the US Congress debating the imposition of sanctions because of it.  The implication throughout has been that Magnitsky was murdered in his cell in order to silence him and prevent him from providing information exposing the corrupt police officials he and Browder were alleging had perpetrated the fraud.  Predictably the western media has taken up the case with the usual flood of angry articles condemning the corrupt and barbaric behaviour of the Russian authorities whilst Transparency International, the agency which publishes a list of countries according to their corruption levels (in which Russia comes close to the bottom) has awarded Magnitsky its prize.

There seems no doubt that Magnitsky’s death was due to negligence on the part of the prison authorities in whose custody he was being kept.  He appears to have been in poor health before he went to prison and it is clear that his death was caused by the failure of the prison authorities to ensure that he received the medical care he needed.  A reporter on Medvedev’s Human Rights Council has suggested that he may have been deliberately mistreated or even tortured.  At the moment this is unproven and since the various prison officials responsible for his conditions of detention are now the subject of criminal charges it is inappropriate to rush to any conclusions until their case comes to trial.

Having said this it is difficult to understand why on the face of it Magnitsky’s case should be attracting the attention that it has.  Anywhere in the world prison conditions are harsh and conditions in pre trial detention centres especially so.  Even in the most advanced countries many people die in prisons.  In Britain the number of people who die in prison in any one year averages around 600 of whom a substantial number are preventable suicides.  In the United States the average in any one year is around 3,000 of which around 50 are murders carried out by prisoners against each other.  I have not been able to find the statistics for Russia but I have no doubt that they are bad and probably worse. 

Nor is Magnitsky the only prominent prisoner to have died in prison in recent years because he was denied proper medical treatment.  The former Serb President Slobodan Milosevic, by any measure a much more prominent prisoner than Magnitsky, also died in prison because the War Crimes Tribunal, which was trying him denied him the medical treatment he needed for a heart condition.  Milosevic’s death as I remember did not provoke the sort of international outcry that Magnitsky’s case has done.

What is it therefore about Magnitsky that merits according his death in prison so much importance?  The short answer is that his case involves a western businessman, namely Browder, who the Russian authorities have accused of corrupt practices.  In any dispute between a western businessman and the Russian authorities the automatic response in the west is to prefer the word of the western businessman to that of the Russian authorities.  From the moment the Russian authorities opened their case against Browder and Hermitage Capital the western media and the western political and business establishment rushed to embrace his story.  In doing so they have found a predictable echo from within Russia’s liberal opposition, which can be relied upon to support the west against the Russian authorities on any question.  In the overheated atmosphere this has created it becomes easy to believe that Magnitsky was murdered to silence him and to prevent him from telling the truth though after a year in prison and with the Hermitage Capital case already something of a cause celebre it is difficult to see what more Magnitsky could have known or said, which he had not said already.

The result is that though we will probably now learn the truth about the circumstances in which Magnitsky met his end we are now very unlikely to learn the truth about what Hermitage Capital was up to or whether any of the allegations of tax fraud made by any of the parties is true.  In the welter of angry denunciations and criticisms made of them the Russian authorities have found it impossible to continue their investigation of Hermitage Capital and Browder.  Their attempts to interview Browder and pursue their investigations against him and Hermitage Capital have got nowhere as they are being denied the cooperation they need from the western countries where Browder and Hermitage Capital are now based.  Their investigation has therefore hit a brick wall and with all the attention now focused on Magnitsky’s death the latest indications are that the case against Browder and Hermitage Capital is going to be quietly dropped.

Some will no doubt see this as a proper outcome to this case.  I do not share this view but then I do not share the universal western assumption that the original allegations against Browder and Hermitage Capital were axiomatically untrue.  It seems to me that at the very least there was a serious case to answer but because of the way the west has meddled in the case answered it will not now be.

MEDDLING IN RUSSIAN COURT CASES PART II: KHODORKOVSKY

In two previous posts I discussed the misreporting of a court case in Russia involving two personalities in Russia’s popular music world.  I also discussed the malign effects this sort of reporting has on the administration of justice in Russia.  Given what I said in those posts and certain recent developments I feel it is only proper if I discuss the two most famous cases before the Russian courts.  Those are the case involving the jailed Russian billionaire oligarch Mikhail Khodorkovsky and the case involving Sergei Magnitsky, a lawyer and company auditor who in December 2009 was found dead in a cell where he was being detained prior to his trial.  In this post I shall discuss the Khodorkovsky case.  I shall deal with Magnitsky in a later post.

Anyone who has made any attempt to follow Russian news with any attention over the last ten or so years can scarcely be unaware of the Khodorkovsky case.  At the time of his arrest in October 2003 Khodorkovsky was reputedly Russia’s richest man and the owner of Yukos its largest oil company.  He was arrested in dramatic circumstances by a special forces unit as his private jet was trying to take off from Novosibirsk airport.  At his trial in May 2005 he was convicted of tax evasion on a massive scale.  His assets including his company Yukos were confiscated by the Russian state and were used to create a new oil company, Rosneft, which is under state control 

In December 2010, whilst still serving his sentence for his first conviction for tax evasion, Khodorkovsky was convicted for a second time following a second trial, this time for company fraud.  The total length of his sentence for his convictions from his two trials is 14 years though the Russian authorities are currently considering his application for parole.  In addition his case is being reviewed by Russia’s Presidential Council, which is due to report to the Russian President Dmitri Medvedev in the autumn.  As President, Medvedev has the power to grant pardons and there is some speculation that he may eventually do so in Khodorkovsky’s case.

The above simply stated are the facts of Khodorkovsky’s case.  They in no way no hint at the international furore the case has caused.  From the moment of his arrest Khodorkovsky has been the subject of a stream of western reporting and commentary that has been overwhelmingly biased in his favour.  He has been represented as the innocent victim of a sinister vendetta by the Russian government and by Vladimir Putin in particular who supposedly concocted charges against him and imprisoned him because of his attempts to open up the Russian political system by providing financial support to opposition parties.  By doing this it is claimed that Khodorkovsky broke an agreement he and other oligarchs had made with Putin whereby Putin supposedly agreed to leave Khodorkovsky and the other oligarchs alone in return for the oligarchs’ agreement to stay out of politics.  Khodorkovsky’s imprisonment is supposedly his punishment for his breach of this agreement.  As for his supposed crimes, these are said to be no different from standard Russian business practice, the implication being that Khodorkovsky has been unfairly singled out or that he is innocent of the crimes of which he is accused.

This version of the Khodorkovsky case has been accepted uncritically in the west and by what passes for liberal opinion in Russia where Khodorkovsky has been represented as a martyr for his political beliefs.  All the major western governments have expressed support for him.  Several western parliaments have passed resolutions in his favour.  Amnesty International has recently declared him a prisoner of conscience.  Meanwhile the western media has campaigned relentlessly on his behalf with every single national newspaper in Britain voicing its support and with angry editorials written on his behalf in I believe all of them.

In June this thesis met its test when Khodorkovsky’s case came before the European Court of Human Rights.  This Court enforces the European Convention of Human Rights of which Russia is a signatory.  The Court is based in Strasbourg and is the world’s foremost court deciding human rights cases.  Khodorkovsky’s application to the European Court of Human Rights was based on his claim that the case against him was politically motivated and was therefore a breach of the European Convention of Human Rights.

The European Court of Human Rights looked into Khodorkovsky’s claims, studied them in detail and deliberated.  Though the European Court of Human Rights has a history of making decisions against Russia on this occasion after considering Khodorkovsky’s case in detail the judges of the Court unanimously decided to throw it out.  They dismissed Khodorkovsky’s claim that the case against him had a political basis by saying that Khodorkovsky had simply not come up with sufficient evidence to prove that this was so.  In its Judgment the Court also said that the case against him involved serious crimes, which is tantamount to the Court saying that he is guilty.  Though the Court recognised certain procedural irregularities in the way in which Khodorkovsky had been arrested and in  his pre trial detention (which unofficially had already been admitted by the Russian authorities) the Court decided that these did not detract from the overall validity of the case brought against him or his conviction and that they merited no more than a payment of compensation, which the Court assessed at 35,000 euros.

In other words the European Court of Human Rights, the court best qualified to decide the matter and a court with a proven track record of decisions against Russia, looked at the theory that Khodorkovsky is a victim of his political beliefs and that he is being persecuted for them and rejected it. 

In the light of this decision I waited to see what western governments and media would say.  I did not expect that they would admit that they had been wrong all along and that they had been deceived by a clever PR campaign orchestrated by a ruthless convicted fraudster and his lawyers.  However I did expect that the Judgment of the European Court of Human Rights would at least merit some attention and commentary and that some lessons would be learnt.

Well I was wrong.  Apart from a few perfuctory mentions when the Judgment was made the news of the decision of the European Court of Human Rights has been greeted by western governments and media with stony silence.  The contrast with the round the clock commentary, ferocious editorials and loud and angry protests at the time of the verdict in Khodorkovsky’s second trial just a few months before at the end of December is astonishing.  The Economist, which has been amongst the loudest of Khodorkovsky’s supporters and the most relentless of Russia’s critics and which as recently as May was publishing articles saying that Khodorkovsky’s arrest was the moment Russia took its turn towards dictatorship, has not reported the decision of the European Court of Human Rights at all.  Whilst there has been a certain lowering of the volume of western reporting of the Khodorkovsky case since the European Court of Human Rights published its decision such reporting as there has been continues much as before.  For example an editorial this week in the Financial Times touched on the Khodorkovsky case as if the decision of the European Court of Human Rights had never happened.  Even a supposedly pro Russian commentator like Geoffrey Hahn writing on Russia Other Points of View continues to write about the Khodorkovsky case as if it was an example of what Russia’s President Medvedev has called “legal nihilism” and has managed to write a piece about the case which shows no awareness that the European Court of Human Rights decided otherwise.

 Indeed Geoffrey Hahn’s article is interesting since unintentionally it reveals a western blind spot on the subject of court cases in Russia.  In his article Hahn praises what he sees as evidence of growing independence on the part of the Russian judiciary.  This evidence turns out to be a long catalogue of Russian court cases in which Russian courts have made Judgments he approves of.  He contrasts this with the decision in the Khodorkovsky case, which he cites as an example of the old bad practice. 

It cannot be said too strongly that the fact that a court system makes decisions with which we happen to agree is not a proper measure of that court system’s competence or independence.  “Favourable” decisions can be procured by wrongful pressure just as much as “unfavourable” ones and it is as wrong to exert pressure to procure such “favourable” decisions as it is to procure “unfavourable” ones.  This however is what the west constantly does.  Had western pressure succeeding in getting the Russian courts to quash the proceedings brought against Khodorkovsky a man who we now know is a major international criminal guilty of massive company fraud and tax evasion would have walked free.  That would not have been good for the rule of law in Russia.  On the contrary it would have undermined it.   That is the true lesson of the Khodorkovsky case.

UNDERSTANDING OSLO – BREIVIK’S MANIFESTO

Just a few hours after I wrote my previous post the Mail on Line has published extracts of what it says is the 1,500 word manifesto written by the presumed Oslo murderer Anders Behring Breivik. 

These extracts fully vindicate the points I made in my previous post.  They show that Breivik was every bit as angry and hate filled as I suspected and that he had elaborated his bizarre beliefs to levels of detail that to any normal person would seem astonishing.  An interesting discovery is that Breivik’s hatred of women seems to be every bit as intense as his hatred of Muslims.  Needless to say this points to extreme feelings of sexual inadequacy born of sexual failure.  It is of course impossible for a man as hate  filled and angry as Breivik to develop successful intimate relations with a woman and his failure to do so will have made him more angry still. 

The manifesto also contains the all too typical reference to a powerful esoteric group.  In this case the group is the Knights Templar.  Instead of casting this group as the evil and sinister occult body that controls the world Breivik portrays it as a union of holy warriors dedicated to the great war against evil, which Breivik says will last for 72 years.  Needless to say he claims to be a member. 

All this is entirely typical.  As I said in my previous post I have come across a surprisingly large number of people with these sort of beliefs.  Based on my own experience I can confidently say that everything in Breivik’s manifesto is entirely the product of Breivik’s own imagination.  I understand that the police are concerned that Breivik has claimed that he is only one of twelve Templars charged with the great mission he claims to be undertaking.  The police obviously have to investigate every angle but I would advise them not to worry.  Again my own experience tells me that someone as peculiar as Breivik is most unlikely to have willing collaborators.  At some level Breivik is undoubtedly aware of the fantastic nature of his belief system and he will not have wanted to share it with others who would sooner or later have called its existence into question.  The claim of eleven other Templars should therefore be seen for what it undoubtedly is, a further example of Breivik’s fantasising.  Probably he borrowed the idea of the sacred brotherhood of the twelve Templar knights from the Twelve Apostles.

In my opinion there is very little that can be usefully learnt from this affair.  In any society however well ordered there will always be a tiny minority of troubled and angry people with bizarre beliefs.  There is always a small risk that one of these people will turn violent in the way that Breivik has done, though the proportion that does so is tiny.  Perhaps the only thing that can be said is that when people with such beliefs surface they require careful watching because the violence they deal out when they do turn to violence tends to be extreme.  At the end of the day there is however only so much that any society can do.  The important thing to do now is not to fret and worry about Breivik but to give aid and comfort to the living as we bury the dead.

UNDERSTANDING OSLO

As I said in my previous post, it is essential when discussing a tragedy like the one that has just struck Oslo to keep a clear head and a sense of proportion.

Far too much in my opinion is being made of the fact that the perpetrator of this atrocity claims to be a “Christian fundamentalist” and an anti immigration nationalist. There has been a spate of commentaries explaining how such supposedly hate filled beliefs have led to the violence that has caused the tragedy.  There is a cartoon in the Guardian concerning the supposed spread of such allegedly toxic views via the internet and a number of worried articles have appeared concerning the existence and spread of militant ultra right and neo Nazi groups in Scandinavia and elsewhere and the danger they supposedly represent.

In my opinion the beliefs of the person apparently responsible for this tragedy provide no explanation for it.  I speak now from experience.  When I was a court official I was regularly struck by the large number of people I would encounter in the course of my work who seemed filled with feelings of anger and hatred.  All too often this anger and hatred had no properly discernable cause.  These were people from well educated and affluent backgrounds so that social and economic causes for their anger and hatred did not exist.  Usually these people had experienced failure in their professional and family lives but far from this being the cause of their feelings of anger and hatred it seemed rather to have been caused by them.  What was especially worrying about these people was that they seemed to be on a perpetual quest to find a reason and focus for their feelings of anger and hatred.  What this meant in practice was that they were always on the look out for people to focus their anger and hatred on.  Typical targets were spouses, partners, neighbours, fellow workers, business associates or rivals and (very often) amorphous groups such as the authorities (especially local authorities), lawyers, Jews, Freemasons, politicians, the Church, the royal family, the Muslims, the Socialists, immigrants etc.  In order to lend some coherence to their feelings of anger and hatred these people would construct often quite elaborate belief systems  usually adapted from whatever ideas were currently in fashion.  These ideas were almost always poorly understood or were even misunderstood and were normally combined with some pretty bizarre beliefs.   .

I am fairly sure that the perpetrator of the Oslo atrocity is an extreme case of the sort of person I am talking about.  If so then his beliefs are neither here nor there.  The reason he carried out the atrocity is not because he holds the beliefs that he does but because he is a very dangerous and violent man with an exceptionally acute personality disorder.  In so far as his beliefs are obnoxious and bizarre they are obnoxious and bizarre because he is a very violent man with an exceptionally acute personality disorder.  It was not these beliefs that made him violent and dangerous because he was that already.  If he had held different beliefs he would still have been violent and dangerous and because he is violent and dangerous with an acute personality disorder any other beliefs he might have had would almost certainly have been as obnoxious and bizarre as the beliefs he actually does have.

In other words the explanation for this person’s actions should be sought not in the realms of ideology and politics but in the realm of psychiatry.

HAVE THE US AND THE UK EVER PREVIOUSLY DEFAULTED ON THEIR DEBTS?

I am writing this post in the light of one remarkable piece of false historical revisionism that is being peddled in the context of the deficit negotiations currently underway in the US.  This is the claim that the US has never previously defaulted on its debts.

This is simply untrue.  In 1933 the US government decided that it would no longer honour its obligation to exchange its currency for gold and to pay its debts in gold as it had previously committed itself to do.  It simultaneously devalued its currency reducing its value as against what those who were holding it had thought it was worth.  This was an openly acknowledged default as was admitted at the time and as a Judgment of the US Supreme Court shortly after confirmed.  In 1971 the US government broke the remaining link between the US dollar and gold, which meant that the US thereafter refused to honour its previous obligation to exchange dollars for gold on demand from foreign (principally European) central banks.  That too by any definition was a default.

The UK has similarly made grandiose claims about how it too has supposedly never defaulted on its debts since the fourteenth (or was it the thirteenth?) century.   This too is nonsense.  In 1931 the British government also decided that it would no longer honour its previous commitment to exchange its currency for gold and to pay its debts in gold.  This was possibly the biggest psychological shock the world financial system has experienced to date.  The British government had succeeded in maintaining sterling’s value on the gold standard without interruption since the sixteenth century.  The idea that sterling might come off the gold standard and no longer be exchangeable for gold in peacetime was thought inconceivable.  The entire world financial system had been constructed on the assumption of sterling’s stability and convertibility into gold so sterling’s sudden devaluation caused a total collapse in confidence across the whole world financial system.  To make matters worse the British government shortly after in 1932 announced that it was making a straightforward default on repayment of its war debt to the US, which it had incurred during the First World War.  The ensuing panic caused a bank run in the US and led directly to the US default of 1933.

The UK undertook two further major devaluations of its currency in 1948 and 1967.  These too should be treated as defaults since they took place during a time of fixed exchange rates.  The effect of these devaluations was that individuals who held sterling on the assurance that it could be converted into other currencies at a certain value found overnight that their holdings of sterling were worth less than the British government had told them would be the case.  Subsequent devaluations that have happened since 1967 differ in that save for the brief period when sterling was within the European Exchange Rate Mechanism the British government has not committed itself to holding sterling to any particular value.

These are the most obvious and best known defaults by the US and British governments made over the course of the twentieth century.  There have certainly be others in previous centuries.  Charles I was for example obliged to convene parliament in 1641 because he too could not honour his debts.  I believe that the US government also defaulted on its debts during the Civil War.

I do not know where the fantasy that the US and the UK have never defaulted on their debts comes from but as I hope I have made clear in this post this claim has no basis in fact.