Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice

Browder writes, “How did this guy with an American accent and a British passport become the largest foreign investor in Russia only to get kicked out? It’s a long story” (12).

Browder’s grandfather, Earl, a labor organizer, spends time in the Soviet Union and twice during the 1930s runs for the American presidency on the Communist Party ticket. In 1940, he is imprisoned briefly, and several years later gets interrogated by the House Un-American Activities Committee: “My grandfather’s political persecution and beliefs weighed heavily on the rest of the family” (13).

His father, Felix, earns a math PhD by age 20 but, due to Earl Browder’s notoriety, must serve two years in the Army before fighting for a position in academia. Eventually, his career soars, and he receives a National Medal of Science. Browder’s mother, Eva, who is Jewish and born in 1929, is adopted in 1938 by a couple in Massachusetts, so that she can escape the growing Nazi anti-Semitic threat in Europe. Her mother follows to America a few years later. Eva attends MIT, where she meets Felix and they marry.

Browder grows up in an intellectual, left-wing household: “The main topics of conversation at the dinner table were mathematical theorems and how the world was going to hell because of crooked businessmen” (15). His brother, Thomas, attends the University of Chicago at 15 and graduates with high honors, then earns a physics PhD and “is now one of the world’s top particle physicists” (15).

His parents go on sabbatical; Browder, interested in skiing, elects to attend the Whiteman School in Colorado because it’s near a ski resort. Here, he is tormented by upperclassmen until he finally strikes back in a fistfight; “from that moment on, nobody ever touched me again” (17). At year’s end, instead of returning home a prodigy, like the rest of his family, he comes back something of a delinquent. His parents send him to counseling, but he continues to rebel; finally, he realizes that he could “put on a suit and tie and become a capitalist. Nothing would piss my family off more than that” (17).

Despite poor grades, Browder manages to wangle admission to the University of Colorado at Boulder, “the number one party school in the country” (18). He pledges to a fraternity and becomes a goof-off until one of his fraternity brothers gets sent to prison for robbery, which serves as a wake-up call. Soon he is getting straight-A’s and transfers to the University of Chicago, which he graduates from. Browder is accepted into the Bain & Company two-year apprenticeship program, then goes to Stanford for his MBA.

As his Stanford schooling winds down, he interviews for positions at corporations and investment firms. He realizes, oddly enough, that he wants to see the world, especially Eastern Europe, where his grandfather had built his reputation.

In 1989, Browder lands a job at Boston Consulting Group’s London office, where he is promised first crack at any Eastern European opportunities. As luck would have it, the Berlin Wall falls a few months later, and communist governments begin to collapse: “The dominoes were falling; soon all of Eastern Europe would be free” (27). Things are looking up: his grandfather “had been the biggest communist in America, and as I watched these events unfold, I decided that I wanted to become the biggest capitalist in Eastern Europe” (27).

In October 1990, Browder flies to Poland, where he tries to save a bus company from bankruptcy. The company is located in the small town of Sanok, where living conditions are meager, the food is cheap but greasy and overloaded with pork, and the hotel rooms are chilly.

Browder discovers that the bus company, Autosan, has lost 90% of its business because its main client, the Polish government, has canceled all orders. Autosan “made some of the worst buses in the world” (36), so saving it will be a big challenge.

He learns that the government is privatizing by selling off its industries at fire-sale prices. He invests his entire personal savings of $2,000 in these new companies. The paperwork is daunting but “in the end, [he] successfully subscribed to the very first privatizations in Eastern Europe” (37).

Try as he might, Browder cannot find an alternative to massive layoffs at the bus company. After some months of working closely with them, he presents his harsh findings to Autosan senior management and World Bank representatives. The executives now regard him not as a savior but a traitor. He leaves Poland humiliated, “knowing one thing for certain […] I hated consulting” (39).

Browder’s $2,000 investment in fledgling Polish companies does very well: “Ultimately, they went up almost ten times” (39). He has found his calling.

Back in London, Browder, along with mentor John Lindquist, prepares an article about investing in Eastern Europe. He visits Maxwell Communications Corporation (MCC), the only western company making deals in the East, and gets a job offer. He is warned that the firm’s hot-tempered owner, Robert Maxwell, tends to fire people a lot, but he accepts the job.

In March of 1991, Browder begins at MCC and quickly learns how fiery Robert Maxwell can be, seeing him browbeat underlings with regularity. Browder gets an officemate, George Ireland, an upper-crust Englishman who has worked previously for Maxwell. Ireland is a cynic about MCC, and his humor brightens Browder’s day.

Within six months Browder has visited nearly every country in Eastern Europe and worked on 300 proposals: “Since I was the one who vetted all the deals, I was effectively the gatekeeper for every Western financial transaction in that part of the world […] I was exactly where I wanted to be” (45).

Late in 1991, Maxwell dies suddenly, and MCC runs into financial trouble. Browder’s bonus check bounces. Police show up at the office and cordon it off as a crime scene: “Maxwell had looted the firm’s pension fund in an attempt to prop up the company’s sagging share price, and now thirty-two thousand pensioners had lost their life savings” (49). Most of the staff are laid off, but Browder stays on as the only employee who knows about the Eastern European operations.

Despite the stain on his resumé, in June 1992, Browder manages to jump ship and land at another company struck by scandal, Salomon Brothers, an investment firm with offices in London. Others there have already staked claims on deals in Eastern Europe, though not in Russia. Browder finds a Russian fishing fleet in Murmansk, on the Arctic coast, that is searching for a privatization advisor. He gets the job, flies there, and discovers that, as in Poland, the accommodations are miserable and the financial opportunities are excellent. The fleet contains $1 billion worth of ships but will be privatized for $2.5 million.

Browder writes, “Is this deal unique to the Murmansk Trawler Fleet, or is the same thing happening all over Russia?” (59). Browder flies at once to Moscow, where he interviews thirty people and learns that the Russian government is handing out vouchers to every citizen, entitling them to partial ownership of newly-privatized Russian companies. The total value, $10 billion, is one-sixth the value of Walmart. Russia’s natural resources alone should be worth much more. And anyone can buy vouchers.

Browder can’t convince people in Salomon’s London office of the opportunity, but he gets a call from the New York office, where investment genius Bobby Ludwig wants to know more. Browder flies to New York and makes his presentation; Ludwig says, “that story’s the most amazing thing I’ve ever heard. I just went down to the risk committee and got twenty-five million for us to invest in Russia” (63).

Back in Moscow, Browder oversees the transfer of Salomon’s $25 million to a Russian bank, manages the purchase of vouchers, and arranges for the conversion of vouchers to stock in several fledgling Russian companies in the oil, electricity, and telephone businesses, among others. By May 1994, Salomon’s Russian shares are worth $125 million.

Famous investors suddenly want an audience with Browder: “I went to San Francisco, Paris, Los Angeles, Geneva, Chicago, Toronto, New York, the Bahamas, Zurich, Boston” (70). One person, billionaire Beny Steinmetz, convinces Browder to fly to Cannes, France to present his information to bank owner Edmond Safra. At the world’s most expensive home, La Leopolda, overlooking the Mediterranean Sea, Browder makes his pitch; Safra listens, thanks him, and exits. Browder fears he has failed, but Steinmetz says, “I know Edmond. That went well” (75). A few days later, Browder resigns from Salomon Brothers. His next move is to start an investment firm, Hermitage Capital, headquartered in Moscow.