No Comment — July 16, 2010, 4:07 pm

Kazakhgate Limps Along

James P. Giffen, who has been at the center of the most significant case ever brought under the Foreign Corrupt Practices Act for a decade now—the so-called “Kazakhgate” scandal—heads back to court today. Bloomberg’s David Glovin offers an interesting discussion of the case:

Giffen, who is scheduled to appear in federal court in Manhattan, worked as an intermediary in Kazakhstan in the 1990s for U.S. companies including Mobil Oil Corp. A resident of the New York suburb of Mamaroneck in Westchester County, he was charged in March 2003 with funneling $84 million to leaders of the Central Asian republic, including current President Nursultan Nazarbayev. Mobil, now part of Irving, Texas-based Exxon Mobil Corp., isn’t accused of wrongdoing.

According to prosecutors, Giffen paid bribes to facilitate six oil deals, including Mobil’s purchase of a stake in Kazakhstan’s Tengiz field, one of the world’s largest. Prosecutors in 2004 publicly identified Nazarbayev, a U.S. ally, as a recipient of Giffen’s alleged payments.

The case was among the largest FCPA prosecutions ever when prosecutors launched it, signaling the expansion of U.S. anti-corruption efforts worldwide. The American law bars companies or individuals working in the U.S. from paying bribes to foreign officials to win business.

Why is this case languishing? Over the past decade, I discussed the case many times with Kazakhstani officials and businessmen. They were uniformly intrigued by it and keen to learn the details of their government’s darker practices—details that have steadily emerged from the case. They were also all of the same view: this case would ultimately go nowhere because it was not in the interest of the United States to expose damaging information about President Nazarbayev. Moreover, several offered that the Kazakhstani government fully understood how to “spin” the American system by hiring prominent lobbyists and consultants and engaging the right political figures. It would be able to forestall the case, they assured me. I would reply that the American system didn’t work that way—that our Justice Department was independent and that prosecutorial decisions were insulated from such lobbying. Truth is, I was never myself absolutely convinced of that, and I always felt a bit naïve saying it.

Glovin’s article presents some information about the depth of Kazakhstan’s considerable efforts to throw a wrench in this case, quoting Peter Zalmayev in the process. It has hired some of the best lawyers in the country, including a former attorney general, and, as Ken Silverstein has noted, it appears to have made use of the services of a company whose board is heavily populated with FBI alumni. Still, it’s not completely clear that this is the cause of the delay. The dealings in federal court have shown that the U.S. Government is not of one mind about the desirability of this prosecution. The Justice Department is standing behind the prosecutors involved, though it has obviously declined to give them the resources that the case calls for. But the recent hiccups in the case make clear that the intelligence community, led by the CIA, wants this case to go away because it is poised to reveal some embarrassing chapters in their Central Asian playbook. The CIA’s withholding of documents looks almost like an effort to sabotage the prosecution.

Today, Justice Department spokesmen tell Congress that battling corruption in foreign business dealings is a high priority. They argue that corruption is undermining the war on terror, costing taxpayers billions of dollars in Iraq and Afghanistan. But the handling of the Giffen case provides skeptics with plenty of reason to doubt the sincerity of the Justice Department’s claims. Within the government there are no shortage of career personnel who believe that a properly delivered bribe to a foreign government official is a necessary sort of compromise. A government that winks at corruption in the supposed name of national security may have a hard time prosecuting it in a commercial setting.

Share
Single Page

More from Scott Horton:

Conversation March 30, 2016, 3:44 pm

Burn Pits

Joseph Hickman discusses his new book, The Burn Pits, which tells the story of thousands of U.S. soldiers who, after returning from Iraq and Afghanistan, have developed rare cancers and respiratory diseases.

Context, No Comment August 28, 2015, 12:16 pm

Beltway Secrecy

In five easy lessons

From the April 2015 issue

Company Men

Torture, treachery, and the CIA

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

August 2016

Four in Prose

= Subscribers only.
Sign in here.
Subscribe here.

Don the Realtor

= Subscribers only.
Sign in here.
Subscribe here.

Atlas Aggregated

= Subscribers only.
Sign in here.
Subscribe here.

The Origins of Speech

= Subscribers only.
Sign in here.
Subscribe here.

Four in Verse

= Subscribers only.
Sign in here.
Subscribe here.

A Sigh and a Salute

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
Martin Amis on the rise of Trump, Tom Wolfe on the origins of speech, Art Spiegelman on Si Lewen, a story by Diane Williams, and more

In Havana, the past year has been marked by a parade of bold-faced names from the north — John Kerry reopening the United States Embassy; Andrew Cuomo bringing a delegation of American business leaders; celebrities ranging from Joe Torre, traveling on behalf of Major League Baseball to oversee an exhibition game between the Tampa Bay Rays and the Cuban national team, to Jimmy Buffett, said to be considering opening one of his Margaritaville restaurants there. All this culminated with a three-day trip in March by Barack Obama, the first American president to visit Cuba since Calvin Coolidge in 1928. But to those who know the city well, perhaps nothing said as much about the transformation of political relations between the United States and Cuba that began in December 2014 as a concert in the Tribuna Antiimperialista.

Illustration by Darrel Rees
Article
Don the Realtor·

= Subscribers only.
Sign in here.
Subscribe here.

"If you have ever wondered what it’s like, being a young and avaricious teetotal German-American philistine on the make in Manhattan, then your curiosity will be quenched by The Art of the Deal."
Photograph (detail) © Polly Borland/Exclusive by Getty Images
Article
The Origins of Speech·

= Subscribers only.
Sign in here.
Subscribe here.

"To Chomsky...every child’s language organ could use the 'deep structure,' 'universal grammar,' and 'language acquisition device' he was born with to express what he had to say, no matter whether it came out of his mouth in English or Urdu or Nagamese."
Illustration (detail) by Darrel Rees. Source photograph © Miroslav Dakov/Alamy Live News
Article
A Sigh and a Salute·

= Subscribers only.
Sign in here.
Subscribe here.

"Si told me that various paintings had spoken to him, but he wished they had been hung closer together 'so they could talk to each other.' This observation planted a seed that would come to fruition years later in his mature work."
Artwork (detail) by Si Lewen
Article
El Bloqueo·

= Subscribers only.
Sign in here.
Subscribe here.

"Amid the festivities and the flood of celebrities, it would be easy for Americans to miss that the central plank of the long-standing cold war against Cuba — the economic embargo — remains very much alive and well."
Photograph (detail) by Rose Marie Cromwell

Chances that a Republican man believes that “poor people have hard lives”:

1 in 4

A school in South Korea was planning to deploy a robot to protect students from unwanted seductions.

Nuremberg’s Neues Museum filed a criminal complaint against a 91-year-old woman who completed a crossword puzzle that was in fact a $116,000 piece of avant-garde Danish art.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Mississippi Drift

By

Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'

Subscribe Today