[Congressional Record Volume 164, Number 106 (Monday, June 25, 2018)]
[Extensions of Remarks]
[Page E907]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    BOLSTER THE U.S. JUDICIARY'S DEFENSE AGAINST PUTIN'S KLEPTOCRACY

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                          HON. ELIOT L. ENGEL

                              of new york

                    in the house of representatives

                         Monday, June 25, 2018

  Mr. ENGEL. Mr. Speaker, while there has been much talk about Russia's 
interference in last year's election, there has been much less focus on 
another serious matter that deserves attention on Capitol Hill. I am 
referring to Russia's attempt to manipulate the U.S. judicial system to 
pursue their corrupt goals and persecute victims of the Kremlin on U.S. 
soil. I include in the Record a recent piece written by Atlantic 
Council Russia scholar, Anders Aslund, which calls attention to this 
growing problem. I was especially troubled to learn that the courts of 
my home state of New York have been targeted as venues for this 
manipulation of justice. We must remain vigilant in the face of these 
efforts to corrupt our democratic institutions. Just as any intrusion 
into the U.S. electoral system must be met with proactive measures to 
safeguard our voting process, the exploitation of our courts by Russia 
and others demands a robust response as well. I plan to work with my 
staff to explore this issue further and would urge my colleagues on 
both sides of the aisle to do the same.

                     [From the Hill, May 25, 2018]

    Bolster the U.S. Judiciary's Defense Against Putin's Kleptocracy

                           (By Anders Aslund)

       United States citizens are outraged about the Kremlin's 
     incursion into the U.S. electoral system, but that is 
     unfortunately just the tip of the iceberg. Russia is also 
     trying to hijack the U.S. judiciary for corrupt purposes, 
     expropriation and political repression, which has received 
     little attention.
       Unlawful seizure of private assets and private companies by 
     the Kremlin has been the norm since Vladimir Putin became 
     president in 2000. Russia's law enforcement agencies and 
     courts are regularly used for the enrichment of the ruling 
     elite.
       Annual State Department and Freedom House reports 
     underscore that the Russian judicial system lacks 
     independence from the country's powerful executive branch.
       The Sergei Magnitsky case is the best-known example of the 
     Russian state's co-opting of the courts to support its 
     kleptocracy. A cabal of Russian tax and law enforcement 
     officers conspired to defraud Russian taxpayers of $230 
     million, the largest tax fraud in Russian history, by 
     targeting Bill Browder's company, Hermitage Capital.
       When Magnitsky, Browder's tax attorney, discovered the 
     fraud and notified authorities, Hermitage and Magnitsky were 
     charged with their own fraud. Magnitsky was then arrested and 
     died in pre-trial detention at the age of 37.
       Since then, Russian authorities have repeatedly called on 
     Interpol to disseminate red notices to harass Browder and 
     other victims. Interpol, which is meant to facilitate cross-
     border coordination among law enforcement agencies, is 
     susceptible to abuse as it passes on requests and notices 
     from states without much scrutiny.
       Russia misuses Interpol's red notices to gain the support 
     of international law enforcement agencies, including U.S. law 
     enforcement, in pursuing political dissidents and victims of 
     corporate raiding.
       Russian legal authorities also abuse the U.S. court system 
     by exploiting U.S. federal discovery laws. Under these laws, 
     a foreign party can use the U.S. federal courts to compel 
     discovery from any person under U.S. jurisdiction.
       The Russian authorities used this law repeatedly against 
     Yukos and its affiliates, after confiscating the oil giant 
     from Mikhail Khodorkovsky and other shareholders.
       More recently, agents of the Russian state have engaged in 
     two federal court cases in New York: a 2016 attempt to loot 
     the assets of Janna Bullock and her real estate investment 
     firm RIGroup, and a 2018 effort to plunder the personal 
     property of banker Sergei Leontiv, a former shareholder of 
     Probusinessbank.
       The Russian state is using the discovery process to extract 
     information to further criminal charges and extortion schemes 
     against individuals who fled to the U.S. seeking the 
     protection, safety and rule of law now being undermined.
       The Russian government and its associates have developed 
     similar strategies to use federal and state courts to 
     recognize and validate bogus decisions from Russian courts, 
     exploit the U.S. Bankruptcy Code on behalf of sham creditors 
     aligned with the Russian state and enforce illegitimate 
     claims and orders issued by corrupt Russian judges.
       Although U.S. judges are permitted to consider evidence 
     questioning the legitimacy of a foreign judicial decision, 
     they are rightly hesitant to speculate on whether another 
     country upholds the rule of law.
       Such a determination requires significant analysis beyond 
     the scope and ability of most courts and therefore leaves the 
     U.S. judiciary ill-equipped to defend itself against Russian 
     incursion.
       The U.S. is slowly beginning to fight back against Russian 
     intrusion into our courts. In 2017, the United States 
     sanctioned two Russian private-sector lawyers, Yulia Mayorova 
     and Andrei Pavlov, who repeatedly represented Russian 
     government agencies in the United States.
       After passage by Congress of the ``Global Magnitsky Human 
     Rights Accountability Act,'' the U.S. sanctioned Artem 
     Chaika, the son of Russia's prosecutor general, who used his 
     father's position to extort bribes and win contracts for 
     himself and his cronies, while driving out competition.
       More needs to be done to keep Russian lawlessness abroad at 
     bay. The House and Senate judiciary committees should 
     investigate the hacking of U.S. courts and hold hearings to 
     examine the threat they pose, with an eye toward developing 
     legislation that will help block future attacks.
       The Department of Justice and the State Department should 
     consider establishing a joint task force to coordinate with 
     U.S. courts, where victims of abuse by corrupt governments 
     could submit their evidence.
       The State Department already produces annual reports that 
     opine on the state of foreign judiciaries, which can be put 
     to good use to protect the integrity of U.S. courts.

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