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:

No Comment March 28, 2014, 12:32 pm

Scott Horton Debates John Rizzo on Democracy Now!

On CIA secrecy, torture, and war-making powers

No Comment November 4, 2013, 5:17 pm

The Torture Doctors

An expert panel concludes that the Pentagon and the CIA ordered physicians to violate the Hippocratic Oath

No Comment August 12, 2013, 7:55 am

Obama’s Snowden Dilemma

How will the Obama Administration handle Edward Snowden’s case in the long term?

Get access to 164 years of
Harper’s for only $34.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

May 2014

50,000 Life Coaches Can’t Be Wrong

= Subscribers only.
Sign in here.
Subscribe here.

The Quinoa Quarrel

= Subscribers only.
Sign in here.
Subscribe here.

You Had to Be There

= Subscribers only.
Sign in here.
Subscribe here.

A Study in Sherlock

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
“In Thunupa’s footsteps grew a miraculous plant that could withstand drought, cold, and even salt, and still produce a nutritious grain.”
Photograph by Lisa M. Hamilton
Article
A Study in Sherlock·

= Subscribers only.
Sign in here.
Subscribe here.

“It is central to the pleasure of the Sherlock Holmes stories that they invite play, and that they were never meant to be taken seriously.”
Illustration by Frederic Dorr Steele
Post
My Top 5 Metal Albums and Their Poetic Counterparts·

= Subscribers only.
Sign in here.
Subscribe here.

“1. Death, The Sound of Perseverance (Nuclear Blast, 1998)”
Photograph (detail) by Peter Beste
Article
Found Money·

= Subscribers only.
Sign in here.
Subscribe here.

“I have spent my entire adult existence in a recession. Like most people I talk to, I assume the forces that control the market are at best random and at worst rigged. The auction shows only confirm that suspicion.”
Illustration by Steven Dana
Post
The School of Permanent Revolución·

= Subscribers only.
Sign in here.
Subscribe here.

“The University of Venezuela has provided a consistent counterweight to governmental authority, but it has also reliably produced the elite of whatever group replaced the status quo.”
Photograph © Daniel Lansberg-Rodríguez

Percentage of non-Christian Americans who say they believe in the resurrection of Christ:

52

A newly translated Coptic text alleged Judas’ kiss to have been necessitated by Jesus’ ability to shape-shift.

Russia reportedly dropped a series of math texts from a list of recommended curricular books because its illustrations featured too many non-Russian characters. “Gnomes, Snow White,” said a Russian education expert, “these are representatives of a foreign-language culture.”

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

HARPER’S FINEST