No Comment — August 9, 2010, 10:01 am

Kazakhgate Ends With a Whimper

The biggest Foreign Corrupt Practices Act prosecution of all time, United States v. Giffen, just fizzled out. The Associated Press reports:

A businessman once accused of paying tens of millions of dollars in bribes to officials in Kazakhstan pleaded guilty Friday to a misdemeanor tax count.
James H. Giffen, 69, left U.S. District Court in Manhattan smiling after his $10 million bail was reduced to $250,000. He pleaded guilty to failing to note on his U.S. taxes that he controlled a bank account in Switzerland. He faces up to a year in prison and a $25,000 fine at his November sentencing. However, Giffen’s small New York merchant bank pleaded guilty to violating the Foreign Corrupt Practices Act. It admitted trying to influence Kazakhstan officials to favor it in contracts by sending two snowmobiles worth a total of $16,000 to a senior Kazakhstan official as a New Year’s gift in 1999. The bank can be fined $2 million or twice the gain or loss that resulted from the crime.

The outcome is a huge embarrassment to federal prosecutors, who had invested a decade in resources in the effort to convict Giffen of FCPA and related violations. The guilty plea arrangement involves a misdemeanor offense for which jail time is not unheard of but still unusual.

The Giffen case has been the focus of political manipulation concerns for years. In a July 2001 feature, “The Price of Oil,” Seymour Hersh documented the wrangling by the Kazakh and American governments that surrounded the criminal investigation. The New York Times’s Jeff Gerth subsequently reported that former Vice President Dick Cheney was involved in efforts to appease Kazakh concerns about the case. Afterwards, prosecutors on the case found themselves suddenly stripped of resources, and it lumbered along agonizingly as Giffen perfected a classic “graymail” defense—arguing that he was collaborating with the American intelligence community in all his dealings, and the U.S. government had approved. As the case approached trial, another stunner emerged: the CIA acknowledged that it had failed to turn over all of its documents relating to the case. With the prosecution sabotaged from within the government, prosecutors have been forced to accept a fig-leaf of a settlement from Giffen.

Kazakhs have long claimed that their government’s strategy of resolving the Giffen case by using the right levers with the American administration–a process that led them to hire former attorneys general and high-profile retired prosecutors, private investigators, and public-relations experts–would be successful. The outcome in the Giffen case appears to ratify that view. The notion of an independent, politically insulated criminal-justice administration in America has just taken another severe hit.

Share
Single Page

More from Scott Horton:

No Comment, Six Questions June 4, 2014, 8:00 am

Uncovering the Cover Ups: Death Camp in Delta

Mark Denbeaux on the NCIS cover-up of three “suicides” at Guantánamo Bay Detention Camp

From the June 2014 issue

The Guantánamo “Suicides,” Revisited

A missing document suggests a possible CIA cover-up

No Comment March 28, 2014, 12:32 pm

Scott Horton Debates John Rizzo on Democracy Now!

On CIA secrecy, torture, and war-making powers

Get access to 164 years of
Harper’s for only $39.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

October 2014

Cassandra Among the
Creeps

= Subscribers only.
Sign in here.
Subscribe here.

“Today Is Better Than Tomorrow”

= Subscribers only.
Sign in here.
Subscribe here.

PBS Self-Destructs

= Subscribers only.
Sign in here.
Subscribe here.

The Monkey Did It

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
"In mid-August, hundreds of displaced Christians who had fled to Erbil were moved by Kurdish authorities into the concrete shell of a half-built mall. "
Photograph by Sebastian Meyer
Article
“Today Is Better Than Tomorrow”·

= Subscribers only.
Sign in here.
Subscribe here.

“Iraq has every disease there is; its mind is deranged with too many voices, its organs corrupted, its limbs only long enough to tear at its own body.”
Photograph by Benjamin Busch
Post
Flying Blind·

= Subscribers only.
Sign in here.
Subscribe here.

“President Obama’s war against the Islamic State will represent, by a rough count, the eighth time the U.S. air-power lobby has promised to crush a foe without setting boot or foot on the ground.”
Article
The Monkey Did It·

= Subscribers only.
Sign in here.
Subscribe here.

“In Murakami’s fiction, what presents itself as a key reveals itself simultaneously to be a keyhole.”
Illustration by Steven Dana
Article
PBS Self-Destructs·

= Subscribers only.
Sign in here.
Subscribe here.

“The present state of PBS, the result of built-in deficiencies and ideological conflicts, was almost an inevitability.”
Illustration by Thomas Allen

Estimated percentage of U.S. gasoline consumption that occurs during traffic jams:

4

In India, 1.8 million female children were estimated to have died between 1985 and 2005 as an indirect result of domestic violence against their mothers; the boys of abused mothers were not at increased risk of death.

Vanilla latte and lemon pound cake continued to be the best-selling items at the Starbucks at CIA headquarters, where baristas do not write customers’ names on their cups.

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

HARPER’S FINEST

In Praise of Idleness

By

I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.

Subscribe Today