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Russian President Vladimir Putin takes part in a televised call-in show with the nation in Moscow on April 17.

Alexei Nikolsky/The Associated Press

Bill Browder used to get treated like a crank when he asked governments to put economic sanctions on Russian officials. Now they ask his advice.

The CEO of Hermitage Capital was an activist investor chased out of Russia for disturbing the country's billionaire oligarchs. He mounted a campaign for sanctions against the officials who persecuted his late lawyer, Sergei Magnitsky.

Now, Mr. Browder is no longer in the wilderness – he's in the mainstream. And he argues that western sanctions against just a hundred or so oligarchs and advisers would push Russian President Vladimir Putin back from the brink for his incursions in Ukraine.

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It would work, Mr. Browder argues, because Mr. Putin is a kleptocrat who has grown wealthy with money stashed for him by oligarchs – and because freezing the businesses of oligarchs will shake the pact between them and Mr. Putin.

"He cares about his money in the West. So this gives us an opportunity to seize it, or freeze it, or to make it less valuable," Mr. Browder said in an interview at an Ottawa hotel this week.

But European nations are balking at broad sanctions that might disrupt trade, especially supplies of Russian energy. The U.S., EU, and Canada have placed sanctions on a number of Russian officials and some oligarchs. Mr. Browder notes that the head of energy giant Gazprom, Alexey Miller, isn't on the list. Obvious targets, some prominent global citizens and owners of famous sports franchises, aren't either. Those drawing up the lists, he said, seem naïve or cynical.

There's a reason governments are asking this investor about who to sanction. He built a business on finding how Russian oligarchs squirreled money away.

His grandfather, Earl Browder, was the leading Communist in the U.S., who twice ran for president against Franklin Roosevelt. He rebelled against the family culture, and set out to become the "biggest capitalist in Eastern Europe." By 1996, he had his own Russian stock fund, Hermitage. It became a $4.5-billion fund, Russia's biggest.

For investors, Russia in the 1990s was the Wild West. He found management was stealing billions from companies in which he owned shares, so his fund researched how oligarchs stole, and exposed it. "We created a whole business model around its Wild Westness," Mr. Browder said. "If we could expose the bad stuff, it would sometimes stop. And if it stopped, then the value of our investments would go up."

Mr. Putin, who pledged to clean things up, ended up working with the oligarchs. He crushed the richest, Mikhail Khodorkovsky, so the others, Mr. Browder believes, made a deal to share wealth with Mr. Putin. Instead of being a welcome gadfly, Mr. Browder was expelled from Russia in 2005.

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More than a year later, Russian authorities raided Hermitage's Moscow office and law firm, seizing corporate documents. Hermitage's tax lawyer, Sergei Magnitsky, investigated and testified that officials used the documents to steal $230-million in taxes. Mr. Magnitsky was arrested, pressured to recant, held in jail for 358 days, and refused treatment for pancreatitis and gall stones. He died in jail in 2009, after a beating, at 37.

Mr. Browder led a campaign to have western nations impose sanctions on officials involved – and in 2012, the U.S. passed the Magnitsky Act, prohibiting them from entering the U.S., or using its banks. But most countries, including Canada, didn't follow suit. They sympathized, Mr. Browder said, but didn't want to pick a fight with Mr. Putin.

If they had, Mr. Browder, believes, Mr. Putin wouldn't doubt the West's will to impose sanctions now. He believes Mr. Putin's real interests are his money.

"It's easily findable. It's too much money not to find," he said. His firm located most of the $230-million from the Magnitsky tax case, so U.S. intelligence agencies could easily find Mr. Putin's money, held by wealthy "oligarch trustees" on his behalf. Mr. Browder said that if he was drawing up sanctions for Ukraine, he'd hit Mr. Putin's cabinet ministers, and about 80 per cent of the oligarchs.

Yes, they could move money to China, but once they are on the U.S. Treasury sanctions list, he said, they can't do business with any company that had U.S. interests, or open a bank account. And when the oligarchs are angry about losing money, a paranoid Mr. Putin will start worrying about which one "is going to come after him first."

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