Six days before President Putin began his war in Ukraine, the Dutch cabinet appointed a Kremlin lawyer to the counsellor of the Supreme Court, the highest judicial body. Alexander van der Voort Maarschalk, who joined the Supreme Court last week, worked at the large law firm Houthoff, which counselled the Russian Federation during some controversial proceedings. The Tax department, where he was a partner, performed ‘extremely poorly’ in complying with legal regulations for the prevention of money laundering.
‘I am grateful to all Houthoffers for a wonderful time!’ At the end of May, on Linkedin, Alexander van der Voort Maarschalk announced, with a big smile, his departure from law firm Houthoff. The reason: his appointment to the office of counsellor in the tax chamber of the Supreme Court, where he started working on June 1st. The message just about went viral: over 800 likes and dozens of congratulations poured in.
Outside of Linkedin, more critical voices can also be heard. Prominent lawyers in the legal profession and academics have their doubts about his appointment. They wonder whether his appointment might damage the reputation of the Supreme Court and the rule of law.
This is because, for many years, Van der Voort Maarschalk was, as tax specialist and litigation lawyer, associated with the large law firm Houthoff. Due to its focus on Russian clients, this firm is also known as the ‘Kremlin on the Zuidas’ [a large business centre in Amsterdam, ed]. For example, the counsellor, who speaks fluent Russian, spent years advocating for the interests of the Russian Federation, in a controversial procedure involving oil company Yukos, now part of state-owned company Rosneft. ‘Alexander was always brought in, because he spoke Russian so well,’ says a former colleague. ‘Those Russians loved that.’
President Putin brutally expropriated Yukos, after which former owner Mikhail Khodorkovsky – a political opponent of Putin’s – ended up spending years in a penal camp. For Putin, it turned out to be an effective way to get Russian oligarchs under his thumb: anyone who makes trouble ends up in jail on suspicion of fraud and tax evasion. Since then, almost all power has shifted to Putin. Russia has long ceased to be a constitutional state with an independent judiciary.
‘The Yukos case is piracy,’ says Germ Kemper, lawyer and former dean of the Amsterdam Bar Association. ‘The international judgement [on the actions of the Russian Federation, ed.] is crushing. The European Court has already ruled that the Russian Federation has to pay almost two billion to the former shareholders of Yukos, for gross violation of norms.’
This did not deter the cabinet from agreeing to the appointment of Van der Voort Maarschalk. That happened on February 18th, six days prior to the Russian invasion of Ukraine, which, thanks to the large-scale build-up of Russian troops on the Ukrainian border, had long been predicted by the Americans.
Soon, the Supreme Court will make a final decision on the 50 billion dollars in damages that the Russian Federation may have to pay the former shareholders of Yukos. Last November, a Houthoff team, which also included Van der Voort Maarschalk, put a stop to this at the Supreme Court. The highest court referred the case back to the Amsterdam court, but the matter will most likely then return to the Supreme Court for final settlement.
As the Russian Federation’s Dutch go-to law firm, Houthoff has been litigating since 2009 against the former shareholders of Yukos, the oil company of which the oligarch Mikhail Khodorkovsky was the top boss, and co-shareholder. Khodorkovsky was a political opponent of Vladimir Putin’s. In 2003, he ended up in a Siberian prison camp, after the Russian state accused him of tax evasion.
The Russian state subsequently filed billions worth of claims against Yukos, and nationalised parts of the company. Yukos went bankrupt in 2006, after which three shareholders started proceedings at the Permanent Court of Arbitration in The Hague. In 2014, that Court ruled that the Russian Federation had to pay Yukos’ shareholders 50 billion dollars in damages. The Permanent Court of Arbitration ruled that the Russian Federation was not really out to collect taxes from Yukos, but to eliminate Khodorkovsky as a potential rival to President Putin and to appropriate Yukos’ assets. Through high tax assessments, Russia had deliberately aimed to bankrupt Yukos.
The Russian state then went to the court in The Hague, demanding the fine be dropped. In 2016, the court ruled in favour of the Russian Federation. The appeal to the Amsterdam court, in 2020, resulted in another win for the shareholders: the 50 billion dollar fine was upheld.
Houthoff then appealed to the Supreme Court, which at the end of last year dismissed almost all objections from the Russian Federation – except one. The Supreme Court referred the case to the Amsterdam court for reassessment.
It is expected that Russia will again challenge a court ruling in the Supreme Court; after that ruling, the procedure is over and no further appeal is possible. The final phase could take up to two years.
As early as 2014, the European Court of Human Rights ruled that Russia must pay close to 2 billion euros in damages to Yukos’ former shareholders, due to the procedurally unfair way in which they have been treated.
The verdict is a preliminary victory for Putin. However, the appointment of his lawyer to the Supreme Court is a permanent success. ‘The dictator [..] will probably see the success and prestige of his Dutch defenders as a reflection on him,’ law professor Diana de Wolff (UvA) wrote early March. ‘Imagine: your internationally acclaimed lawyer [Van der Voort Maarschalk, ed.] wins your case at the Supreme Court and is then appointed to said Supreme Court, a few months later. Whatever you, in all your unscrupulousness, may have done, must be okay.’
De Wolff points out that Russia has not only laundered money in the West, but also its reputation. The Netherlands has been helpful in both areas. At Amsterdam’s Zuidas, law firms rolled out the red carpet for Russian kleptocrats and state-owned enterprises that, in order to protect their assets, wanted to make use of the benefits of our business climate and well functioning legal system. Houthoff was at the forefront: the partners earned millions from Kremlin affairs. Representatives of a thieving, murderous regime were welcomed with open arms – often by Van der Voort Maarschalk personally.
The war in Georgia (2008), the wars in Chechnya (until April 2009), the assassination of Sergei Magnitsky (2009), the annexation of Crimea (2014), the subsequent war in eastern Ukraine, the downing of MH17 with Russian aid (2014), the (attempted) murder of opponents at home and abroad (Nemtsov, Litvinenko, Skripal, Navalny) and the horrific war in Syria, in which Russia, among other things, bombed hospitals (2019) – none of it stood in the way.
It wasn’t until Russian troops invaded Ukraine on February 24th, that Houthoff's business model fell apart. In early March, under great pressure from media and politicians, Houthoff and other Zuidas firms said goodbye to this very well-paying part of their clientele.
By then, the appointment of Van der Voort Maarschalk was already a done deal. Why did the Supreme Court put this lawyer at the top of its list? What requirements does the Supreme Court set for a candidate’s integrity and independence? What was known about his work for the Kremlin? Was the House of Representatives, which approved the appointment, informed about this candidate’s connections? And did his background play a role in the proceedings at all?
The appointment procedure: completely depoliticized
The Dutch Constitution stipulates that Supreme Court members are chosen from a list of three nominated candidates, drawn up by the House of Representatives. To this end, the Supreme Court sends a list of candidate recommendations to the House of Representatives.
The Supreme Court naturally sets requirements for the professional competence of a lawyer, whereby scientific experience is an advantage. There are no formal requirements regarding ethical matters such as integrity and independence, according to the protocol. Nominations are ‘based solely [..] on the substantive qualities and specialisms of the candidates and are tailored to the needs of the Supreme Court in this regard,’ said Geert Corstens, then president of the Supreme Court, in 2012.
For civil servants, the rules are more strict. In the Code of Conduct for Integrity in the Central Public Administration, those ethical standards are described. An example: ‘You will have to be aware of your visibility and of the fact that you are constantly accountable for your behaviour. This means that you have to take responsibility for your behaviour, and will (retroactively) be held accountable for it.’
When asked, the Supreme Court says that a candidate’s ‘judicial attitude’ is also assessed, which covers ‘impartiality, independence, and integrity’.
On November 11th of last year, the president of the Supreme Court sent its list of candidates to the House of Representatives. The list included Van der Voort Maarschalk. His work for the Russian Federation had to have been well known: on February 5th, 2021, he appeared before the highest court, in person, pleading the Yukos case. By his side was Russian Deputy Justice Minister Mikhail Galparin. He gave a fiery speech in which the former shareholders were portrayed as criminals, and the Russian state was portrayed as a victim. (That speech was also broadcast on Russian state television.)
The Supreme Court also provides the House with curriculum vitaes of the candidates, which are made available for inspection, confidentially, to the members of the Standing Committee on Justice. The Supreme Court confirms that his work for the Russian Federation is not mentioned on his resume.
With this in mind, there is a good chance that the MPs did not discuss this subject with Van der Voort Maarschalk before the House Committee approved his nomination. On December 14th, the House approved the nomination, as usual without holding a vote. Several MPs Follow the Money consulted declined to answer our questions, citing confidentiality.
The House always follows the recommendations of the Supreme Court. Since 1945, there has only been one exception
Professor of Constitutional and Administrative Law Wim Voermans (Leiden University) does not consider the appointment problematic. ‘The fact that a lawyer has worked for the Russian Federation does not mean that he has aligned himself with those interests. I don’t see that as a disqualification.’
The House always follows the recommendations of the Supreme Court. Since 1945, there has only been one exception. Parliamentary control over these appointments is therefore virtually absent: the role of the House is a mere formality, and appointments are completely depoliticised. There is a good reason for this: appointments of counsellors should not be used to further political ambitions. That is why almost everyone thinks it is normal for CVs to be confidential, and for there to be no public discussion about the (desired) profile of a candidate, or about his past in business or academia.
Laxity in compliance
There is another reason why Van der Voort Maarschalk’s past is relevant. It is characterised by far-reaching laxity in compliance with the Dutch law for preventing money laundering and the financing of terrorism. Law firms, like bankers, are required to verify who their clients are; the procedure is known as ‘know your customer’ (KYC).
Lack of compliance was not only a problem for Van der Voort Maarschalk’s Tax team. It was a broader issue at the Houthoff firm
The reason for this is that lawyers and notaries are instrumental in the moving and hiding of assets. Violation of this obligation is punishable under the Dutch Economic Offenses Act (Wet op de Economische Delicten, ed.), in cases of intent. (Administrative) Fines can also be imposed by the Bar Association, the supervisor.
The importance of compliance applies to a greater extent to tax specialists, something of which Houthoff is fully aware. But Van der Voort Maarschalk and the members of his Tax team failed to take this very seriously, according to an August 5th, 2019 e-mail from former Houthoff director Gerhard Gispen, written to his colleagues at the firm.
He wrote: ‘The Tax practice group scores extremely poorly in KYC compliance. Tax currently scores 35.61%, which means that almost 2 in three files do not have a complete KYC check. All three of you individually score failing marks, ranging from 31% to 40%. This is worrying for a number of reasons, not least because Tax is by nature the most Wwft-sensitive practice. [..]’
Lack of compliance was not only a problem for Tax, as research by Follow the Money and Het Financieele Dagblad shows. It was a broader issue at the firm. At Houthoff, profitability was more important than the prevention of money laundering, former employees told Follow the Money.
Underdeveloped critical faculties
Lawyer and former dean Germ Kemper provides ethics trainings at large firms and notices that the subject is no priority. ‘Financial incentives partly determine the culture of almost every large law firm, as a result of which lawyers’ critical faculties are not properly developed. Ethics have not begun to influence their decisions after 2014, either. Public opinion played a major part [in distancing themselves from Russian clients, ed.]. Morality didn’t suddenly take the lead.’
According to Kemper, ethics, to a lawyer, are something strictly personal. ‘When I ask lawyers an ethical question, they look into the rules of conduct. But one could also think about what your own feelings are. Is this something I want to do? Doesn’t this make me feel ashamed? Am I comfortable with this?’
Van der Voort Maarschalk does not wish to reflect on his work as a trial lawyer for the Russian Federation
As a lawyer you have to be able to defend anyone, Kemper says. ‘It’s not, by definition, wrong to defend the Russians. But when you’ve associated yourself with these interests for years, and you’ve never once wondered if you ought to be able to sleep well at night, then you can question the critical faculties of those involved.’
Van der Voort Maarschalk declines to respond to questions from Follow the Money, and does not wish to reflect on his work as a trial lawyer for the Russian Federation. Over the phone, he referred us directly to Houthoff's spokesperson. ‘I wish you luck with your article.’ The spokesperson says: ‘We will not cooperate with the questions formulated by you regarding the swearing in to the Supreme court by King Willem Alexander of Alexander van der Voort Maarschalk.’
The Wattèl Case
Former dean Kemper knows the Russian legal clout from personal experience. In 2012, Peter Wattèl, advisor to the Supreme Court, published the column ‘Punitive psychiatry – punitive taxation?’ in the Nederlands Juristenblad. In the column, he argues that Russia abuses tax law for political ends, much like how in Soviet times psychiatric institutions were used to deal with political opponents. ‘Perhaps we need not pity Khodorkovsky or Yukos, [..] but the name of taxation as a means of expropriation without compensation and the decade-long detention of political opponents was established.’
In the Netherlands, Houthoff's lawyers were not afraid to sound the alarm in Moscow about Wattèl’s article. They subsequently filed a complaint with the Supreme Court on behalf of the Russian Federation to have Wattèl’s conduct investigated. Lawyer Matthijs Kaaks later wrote a column about it in Het Advocatenblad: ‘If the Gasunie [a Dutch public energy company, ed.] had submitted such a complaint to the Russian pg [prosecutor general, ed.] Yuri Tchaika, the Homeric laughter would have been heard as far as Groningen [province where Gasunie is operating]. But things are different in The Hague.’
It came to a hearing, at which lawyers from Houthoff and other firms expressed the Russians’ grievances. Germ Kemper stood up for the attorney general, successfully: in 2014, the Supreme Court ruled that Wattèl was blameless.
In Van der Voort Maarschalk, a lawyer joins the court who has been paid from that ‘bottomless war chest’
A team of about five appeared at the hearing, Kemper recalls. ‘What I find curious – and I am expressing myself cautiously – is how they plunged themselves headlong into an issue like that, with all that legal force, and it was paid for. When clients provide unlimited funds, is it responsible to throw everything into the fray? The odds of success, with this complaint, were very small, and there was zero point to it. That indicates a bottomless war chest. I found it intimidating.’
Wattèl is still advocate general at the Supreme Court. In Van der Voort Maarschalk, a lawyer joins the court who has been paid from that ‘bottomless war chest’. By welcoming him, the counsellors risk creating unrest in their own ranks, and damaging the Supreme Court’s reputation.
Finally, there may also be an international component to this reputation. In 2017 and 2018, European Commissioner Frans Timmermans spoke out at length against the decline of the Polish and Hungarian constitutional state, and even took those countries to the European court. In November 2021, the President of the Supreme Court, Dineke de Groot, held the Cleveringa lecture for students of the University of Warsaw. In it, she extensively discussed the attempts of the Polish government to undermine the independent judiciary.
The question is how Polish and Hungarian politicians will react when they realise that the Dutch parliament and the government have agreed to allow a former lawyer for the aggressor to sit on the highest Dutch court.
Translation: Chris Kok
As an appeals court, the Supreme Court is charged in particular with promoting unity of law and development of law, and offering legal protection in legal proceedings. Candidates for an appointment as counsellor to the Supreme Court must be able to contribute optimally to the proper performance of these duties. The quality and authority of the Supreme Court's administration of justice are leading in the appointment procedure.
You have already received information about the appointment procedure last Friday, through the answers to your previous questions. The Supreme Court sends a recommendation to the House of Representatives. The House of Representatives draws up nominations and sends them to the government. The government decides on an appointment, which takes place by Royal Decree.
The Protocol for the recruitment and selection of counsellors for the Supreme Court specifies the procedure for Supreme Court recommendations to the House of Representatives. The Protocol is publicly available. For recruitment and selection, the Supreme Court looks at a counsellor’s profile, and the profile and composition of the relevant chamber of the Supreme Court. The websites where this information can be found were sent to you on Friday.
Candidates tend to be employed as judges, lawyers, scientists, or at (tax) consultancy firms. Partly on the basis of the profiles, prior to the formulation of a recommendation, the expertise and experience of a candidate, and their judicial attitude, which covers impartiality, independence and integrity, are assessed.
In assessing the suitability of a candidate, the legal position that a candidate occupies in the profession is respected. For example, due to the independent role of the judge, which cases on which a judge has ruled, and which decisions have been taken in them, are not taken into account. Likewise, because of the lawyer’s role in the administration of justice, which is enshrined in the Act on Advocates, which cases a lawyer has handled, and who were clients in those cases, is not taken into account.
The procedure of recommendation, nomination, and appointment of candidates who meet the profile of a counsellor is a lengthy and careful process. Information about candidates in an application procedure is confidential. You will therefore not receive that information.
The nomination that the Standing Committee for Justice and Security proposes to the House of Representatives is public. This is part of the Parliamentary Papers on the website of the House of Representatives. The adoption of the nomination by the House of Representatives is also public, as part of the public voting lists of the House of Representatives’ public voting lists.