Bill Browder: Putin Thinks He Can Outlast Us

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: Our next guest, investor Bill Browder, joins Walter Isaacson to discuss the effectiveness of the NATO ally sanctions on Russia and the pace of its assistance to Ukraine at this critical juncture.

(BEGIN VIDEO CLIP)

WALTER ISAACSON, HOST: Thank you, Christiane. And Bill Browder, welcome back to the show.

BILL BROWDER, CEO AND CO-FOUNDER, HERMITAGE CAPITAL MANAGEMENT: Great to be here.

ISAACSON: You were once the largest foreign investor in Russia. And now, for the past two decades, you’ve been one of the strongest enemies, I would say, of Vladimir Putin, especially trying to put sanctions on him for the things he has done. And now, Ukraine. Tell me, in the past year, since the Ukrainian war has happened what you’ve learned.

BROWDER: Well, we were living in a world before where everybody was for — literally, for 20 years everybody was trying to appease Putin. He would do the most terrible things. He invaded Georgia. He carpet-bombed Syria. He took Crimea. And nobody wanted to do anything. And somehow thinking that if they just, like, kept their hands away from him, he would somehow behave himself. And what we’ve learned is that he’s a murderous — a mass murderer who’s invaded a foreign country, escalated the war, killed tens of thousands, if not hundreds of thousands of people. And we’re now in a world where we have to use everything we’ve got to shut this guy down to —

ISAACSON: Wait, when you say everything we’ve got, are you talking more about economic sanctions or should we just go in militarily?

BROWDER: Well, I don’t think any of us want to send our own troops into Russia. But I think that if you look at the behavior of the United States and the E.U. and various other countries militarily, we’ve given the Ukrainians enough not to lose the war. But it is drip feeding as we give them the stuff, and they certainly don’t have enough yet to win the war. Zelenskyy is going around begging for stronger weapons to repel and get the Russians out of Ukraine. And it’s a thought-out strategy not to give the Ukrainians what they need. I’ve heard this stated explicitly from the United States and other countries. Everybody is worried now about provoking Putin and escalating when Putin is doing all the escalating.

ISAACSON: Well, wait. You say, you talked to U.S. and other military officials and people around the world and they say, we cannot do that because the escalation could get too bad. Ain’t there a little truth in that? Don’t they have to worry about this really escalating out of control?

BROWDER: Well, so, it’s — it escalated out of control on February 24th. Vladimir Putin launched an invasion of a peaceful neighbor. That was the escalation. He’s bombing them every day. He’s bombing civilians. He is trying to take out electricity infrastructure. He is killing people all over the place. That’s the escalation. And so, all we’re trying to do now is stop this, and the only way to stop it is by defeating him. And if you look at it from a U.S. standpoint, here you’ve got a hostile international power that is — doesn’t have our best interests at heart, we don’t have to lose a single American life by supporting the Ukrainians. They are ready to fight for all of our freedom, we should give them everything they ask for.

ISAACSON: For the past year, you’ve been going around the world, and you’re talking about more and more sanctions. Tell me, though, what sanctions have been effective so far?

BROWDER: Well, I think all of them have been to a greater or lesser extent. But you have to think about sanctions to wins. What — sanctions can either be a deterrent, which they haven’t been because we did not use them properly beforehand, or they can be punishment. Here, they’ve been a punishment. And so, there is a whole different, sort of, sections of sanctions. The first is that we’ve frozen $350 billion of Russian central bank reserves, that’s like their war chest, that money is no longer available to them. We’ve also sanctioned about 40 Russian oligarchs, and there’s hundreds of billions of dollars of oligarch money frozen around the world, which in my opinion, that’s sort of another war chest to Putin. He can draw on that money. And we’ve also cut Russians — Russia’s banks, many of them, most of them, off of the SWIFT international banking system. We’ve sanctioned the oil companies. We’ve also made it impossible for them to import technology. And this is — I think all of these things are grinding Russia down. It’s not going to be something that happens overnight, but it’s grinding Russia down.

ISAACSON: And when do you think that will grind them down so that they might stop?

BROWDER: I’m not sure it’s going to grind them down to them stopping for one simple reason because they continue to sell oil and gas in large quantities to the west. The numbers after the war were like a billion dollars a day of western money was going into Russia. And billion dollars a day was being spent to kill Ukrainians. And the numbers might not be a billion dollars a day anymore, maybe it’s $700 million a day or $500 million a day, but it’s still a lot of money that’s going into Russia which they can use for their war effort. And until we stop buying their oil and finding a way to get other people to stop buying their oil, they continue to have money to do this.

ISAACSON: How can we get people to stop buying oil? I mean, what should we do on oil?

BROWDER: We could say to all the — there is a big proportion of the world right now, a very big proportion, the G7, the European Union, who have all said, we want to sanction Russia. We want to prevent them from doing this. And then there is a much smaller section of the world from an economic standpoint that says, we want to continue to do business with Russia. Countries like South Africa, and Indonesia, and Brazil, and India. And we could easily, if we wanted to, we could say to those countries, if you want to do business with us, you can’t do business with Russia.

ISAACSON: Well, wait a minute. If we had to do that, we’d be saying, you can’t do business with China, you can’t do business with India, you can’t do business with South Africa. All of these countries have not yet joined the sanctions regime.

BROWDER: But that’s what I’m saying. So, you go to South Africa, for example, you say — you know, you want 70 percent of the world or you want one percent of the world? Because if you do business with one percent of the world, we’re going to cut you off from 70 percent of the world. We could actually do that. And if we did that, they would have to make a choice. Right now, we’re not forcing them to make any choice. And we could isolate Russia much further than we’re currently doing if we said to everybody, you know, it’s either us or them. And everybody always votes with their feet and votes with the money when it comes down to it. We have not put that to them. We haven’t been tough in that way, that’s one thing we could do. There is one other thing which I’ve been going around the world talking about which I think it would make a big difference in the war in Ukraine. Which is that, after the war started, the first thing the western governments did was we froze $350 billion of central bank reserves. The war has done one — at least a trillion, maybe $1.2 trillion of damage to Ukraine. Russia’s done the damage. We have custody of their money. Instead of just having that money frozen, that money should be confiscated and handed over to the Ukrainians, both for their defense and their reconstruction. Putin broke it, he should fix it. That’s probably the single biggest thing we could do in a very short term to tip the balance in Ukraine’s favor in this whole conflict.

ISAACSON: Explain to me the mechanics of confiscating their central bank reserves.

BROWDER: Well, so at the moment, those reserves are protected by something called sovereign immunity. Sovereign immunity means that anything that belongs to a country, a state, can’t be taken away. You cannot, like, just move into the embassy because you would like that property because it belongs to that country. And normally, that would be a reasonable thing and that’s how international law has worked for the las, you know, many, many years. Now, Putin has redefined international crime. He has redrawn the borders of Europe. He’s invaded a foreign country. He’s killed — he’s been a mass murderer. He killed the unimaginable numbers of people. And so, we’re sitting there in the situation where he is redefining international crime. And we’re sitting there and saying, and your money is still protected. We need to redefine international law to elevate it to the level of his — the way he is become an international criminal. And what does that mean specifically? That means that laws have to be passed in a number of major developed countries which says that sovereign immunity always applies in every single circumstance, except in the circumstance when a country has invaded a neighboring country and committed an act of aggression, which is how this war is being defined under legal terms. So, that’s the one narrow circumstance where sovereign immunity no longer applies. If we did that, if the United States and the European Union and Great Britain and Canada and Japan, we wrote their laws to say that sovereign immunity applies in all circumstances other than those, then we could then confiscate their money. We wouldn’t be doing it illegally. We’d be doing it based on a law that’s been rewritten to adapt itself to the current situation.

ISAACSON: If you wanted to confiscate the foreign reserves and you’ve talk about laws being passed in the west, would China and India have to go along?

BROWDER: Well, so the thing is that all you to do is get the countries that have reserve currencies to revise their laws. So, in other words, if we don’t — you know, if China — we don’t keep our money in China. So, it’s not a reciprocal thing. If you get the major reserve currencies in places where Russia keeps their money — and by the way, there’s one other great benefit to doing this which is that if we confiscate Russia’s money for invading a neighboring country, who else has got a whole bunch of money? In the west that’s eyeing and potentially going to invade a neighboring country, that’s China. Now, some people would argue that this idea is a dangerous idea because what where’s — China will just, like, abandon all countries and keep their money at home. But that’s just — you know, if it’s just the U.S. doing this, that might happen with the dollar. But if everybody does it together that has a reserve currency, China — then China will have to go along with it — I mean, they’ll have to be scared of it.

ISAACSON: What about in the Middle East? Both Israel and the Saudis don’t seem to be on board. What do you — what is the reason for that and what can be done?

BROWDER: Well, I think it’s really shameful that the Israelis who — Israel is a country that was formed as a, sort of, reaction to a genocide, are now seeing a genocide taking place in another country and are not helping out that country. I find that really unpleasant and disturbing.

ISAACSON: Why is that, do you think?

BROWDER: Well, their argument is that the Russians are in Syria. Syria proposes an existential threat to Israel and therefore, they’ve got to play all different sides. I think they could easily — for example, the Israelis have an iron dome defense situation which prevents people from bombing them. They should provide that iron dome defense mechanism to Ukraine so that they’re not — the Ukrainian infrastructure isn’t destroyed. They could easily help Ukrainians with defensive weapons. And on the Saudi Arabian side, they’ve really not been a good ally to the United States. They’re — historically, the United States had a deal, which is that the Saudis keep oil prices stable to keep the economy stable and in return, the United States provides a, sort of, military blanket over Saudi Arabia so that they are protected. And the military blanket continues to exist, but they haven’t been playing ball when it comes to oil. I mean, when the oil prices went up because of Putin. What did they do? They cut production even more. I think the Saudis aren’t playing fair game, and nor is the United Arab Emirates. The United Arab Emirates are hosting scores of Russian oligarchs, numerous Russian oligarch yachts are parked in Dubai. You know, this is another country that’s supposed to be an ally of the United States and they’re not playing ball. And so, there’s a lot of pressure that we could apply to our allies if we chose to do it. And the United States is a very powerful country and I believe should in all three cases.

ISAACSON: One of the things you’ve always pushed for is going after Putin’s wealth personally. Tell me, how did he get all that money and where is it and what can we do?

BROWDER: Well, so, Putin doesn’t keep any money in his own name. If he did, then whoever had the bank documents to show it could blackmail him. So, Putin has to rely on people he trusts. I call them oligarch trustees. And so, when you see an oligarch who is supposedly worth $15 or $20 billion on paper, you can be pretty well sure that half that money belongs to Vladimir Putin. And so, when we sanctioned the oligarchs, when we identified the biggest and richest oligarchs in Russia and we freeze their money, we’re not just freezing their money, we’re freezing Vladimir Putin’s money. And so, one of the reasons that I’ve been so forceful on the issue of sanctioning Russian oligarchs is because we’re sanctioning Vladimir Putin personally. And so, the — we’ve done a good job with that. And, you know, he says, oh, this doesn’t matter. Well, he’s fuming when these oligarchs find their assets frozen at different banks around the world.

ISAACSON: You said this is going to be a long war, the way it’s going now. Envision for me what it will be like five years from now if this thing is still going on the way it is.

BROWDER: Well, this is Putin’s — Putin, his vision, in my mind, is he knows he can’t win the war. But he also doesn’t care about the lives lost from his side. He doesn’t really care about the destruction of his military equipment. In this — in his mind, what he’s thinking is that we’re going to lose patience before he loses patience. He’s thinking that in these democratic countries where we have elections all the time, where we grow tired and are — where we have a limited bandwidth that eventually we’re going to stop supporting Ukraine. And that’s his only way out of this whole thing, is just to outlast us. And so —

ISAACSON: Well, wait, wait. Might he be right?

BROWDER: That — I think, that’s my biggest fear. I mean, if you look at the trajectory of the Ukrainians right now, they’re really causing just no end of hardship for Putin and his military. And on the current trajectory, he — the Ukrainians probably would eventually succeed over some long period of time. And so — but — the — we’ve heard murmurings in the United States and Europe from far-right, from all sorts of strange character saying no more money for Ukraine, no more support for Ukraine. If those murmurings that are, at the moment, very narrow in sections of the political establishment become bigger sections, Putin may very well be right, and that’s the fear I have. And the reason why it is so important that we actually finally pony up whatever we have to do to help the Ukrainians win in a shorter period of time.

ISAACSON: Is it possible that there could be negotiations or is that something you just can’t envision?

BROWDER: Well, I’ve been in a conflict with Putin — personal battle with Putin for more than a decade over the murder of my lawyer, Sergei Magnitsky. And I’ve seen — and the battle has escalated to the point where there is international sanctions named after Magnitsky applied to Russia which has led to all sorts of retaliation by the Russian government. And every time the Russians have an opportunity to do the right thing to negotiate, to back down, to be reasonable, instead of doing the right thing, they’ve double down, tripled down, and escalated. I’ve never seen a moment when Putin shows any sign of compromise, any negotiation, any reasonableness. In anything I’ve ever dealt with and anything else, he doesn’t have the capacity to do that. And so, here we are with this war in Ukraine and he can’t afford to show one tiny sign of negotiation or compromise. And I — so, from that perspective — and we’ve seen it play out. He doesn’t — and he says, I’m ready to — for a peace negotiation. And that negotiation, the preconditions are Ukraine gives up their territory and that’s it. And of course, the Ukrainians aren’t going to give up their territory. He invaded, he should be rewarded with their territory, no way.

ISAACSON: Bill Browder, as always, thank you so much for joining us.

BROWDER: Thank you.