World News

12.19.13

Exclusive: Obama Declines to Add Names to Russian Sanction List

The administration had been preparing to beef up its list of Russian human rights violators. But at the last minute, they balked. Why?

The Obama administration has decided not to add any new names to a list of Russian human rights violators this year, an abrupt reversal that has left congressional officials and human rights advocates stunned.

For weeks, State Department officials had been signaling that they were preparing to expand a list of Russians subject to visa bans and asset freezes under a law signed by President Obama last year called the Sergei Magnitsky Rule of Law and Accountability Act, named after the Russian anti-corruption lawyer who died after being tortured in a Russian prison. Magnitsky was later convicted posthumously for tax evasion in a prosecution widely viewed as politically motivated.

In April, 18 Russian officials were sanctioned as a result of the Magnitsky law, which was heavily supported by lawmakers in both parties. The sanctions caused a rift in U.S.-Russian bilateral relations, and the Russian government retaliated by announcing their own visa ban list of alleged U.S. human rights violators and instituting a ban on Americans adopting Russian orphans.

Now, one year after the initial Magnitsky law went into effect, the State Department had been preparing to add between 10 and 20 new Russian names to the list—including Alexander Bastrykin, former First Deputy Prosecutor General of Russia and former Chairman of the Investigative Committee of the Prosecutor General’s Office—according to officials, congressional aides, and experts.

But Thursday, administration and congressional sources said that the Obama team had abandoned plans to expand the list, thereby avoiding a new confrontation with the Russian government during a sensitive time in the U.S.-Russian relationship, as the two countries work together on issues like Syria and Iran.

“We had multiple high-level assurances that there had been new names,” one Congressional aide told The Daily Beast. “Now we hear today that there’s not going to be a new list. There’s no explanation.”

A mandated report on the implementation of the Magnitsky act was due on Dec. 14 but has still not been sent to Congress. The new names were widely expected to be added to the list when the report was delivered.

“The administration is not legally obliged to add names on any specific schedule, but the expectation was that they were going to add new names along with this report,” the aide said.

The State Department did not respond to requests for comment. Several outlets reported Thursday that Russian President Vladimir Putin has decided to pardon oil tycoon Mikhail Khodorkovsky after 10 years in jail, but it was not clear if the two issues were linked.

“We had multiple high-level assurances that there had been new names.”

William Browder, a business associate of Magnitsky and the president of Hermitage Capital, an asset management company specializing in Russian Markets, told The Daily Beast Thursday that over the last several weeks several names had been vetted extensively through various parts of the U.S. government, including the State Department, the Treasury Department, and the Justice Department.

“An expanded Magnitsky list was created and fully vetted by officials in the State Department and Treasury and sent to Secretary of State for approval. If there is no expansion of the Magnitsky list, then it shows that Kerry is defying the will of Congress and the rule of law to appease Putin,” Browder said.

In April, Sen. Ben Cardin, a Maryland Democrat and an original co-sponsor of the Magnitsky law, said that he was expecting the original list to be expanded after one year’s time.

“This first batch of names released by the administration pursuant to the Magnitsky Act is a serious and historic first step…I look forward to continuing the collaboration between Congress and the Obama Administration in implementing the Sergei Magnitsky Rule of Law Accountability Act to ensure that those who should be on this list are in fact on this list,” Cardin said in April. “I am fully confident that this list, and future names that will be added, can stand up to international scrutiny.”

In June, Sen. John McCain (R-AZ) wrote to President Obama  (PDF) asking him to designate a Russian group implicated in the Magnitsky case as a criminal organization. McCain named Russian banker Dmitry Klyuev and his lawyer Andrei Pavlov as potential targets for punitive action.

Other names that have been suggested for the expanded Magnitsy list include Denis Katsyv, who had $24 million frozen in New York City in September, and Vladlen Stepanov, who is also connected to the Magnistky case and whose wife Olga is already on Treasury’s list.

Over the course of the past year, several State Department officials had pledged to expand the list.

“I should point out that this is not a one-time only act. The law makes clear that additional names should be added as new information becomes available,” a senior State Department official said in April. “The law also provides for an annual report to Congress about names that have been added, and we intend to follow the law.”

National Security staff spokesperson Caitlin Hayden told The Daily Beast Thursday evening that even if new designations are not included when the Congressional report on the Magnitsky list is eventually released, more Russian officials could be sanctioned at some undetermined time in the future.

"While I can’t speak to the timing of any additional designations—which are not required to occur at the same time as the annual report—a number of cases are under review and the administration is determined to fully implement the Act by making further designations as appropriate," she said.