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:

From the April 2015 issue

Company Men

Torture, treachery, and the CIA

Six Questions October 18, 2014, 8:00 pm

The APA Grapples with Its Torture Demons: Six Questions for Nathaniel Raymond

Nathaniel Raymond on CIA interrogation techniques.

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

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

United States Canada

CATEGORIES

THE CURRENT ISSUE

July 2015

Dressed to Kill

= Subscribers only.
Sign in here.
Subscribe here.

Wrong Prescription?

= Subscribers only.
Sign in here.
Subscribe here.

Travel Day

= Subscribers only.
Sign in here.
Subscribe here.

Fugue State

= Subscribers only.
Sign in here.
Subscribe here.

One Day Less

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
Avian Voices·

= Subscribers only.
Sign in here.
Subscribe here.

“The mockingbird’s bath is an orgy of thrashing and writhing about. When he has finished, one of the innocents alights on the rim of the basin and looks with disbelief at the thimble of water remaining.”
Illustration by Eric Hanson
[Browsings]
Before the War·

= Subscribers only.
Sign in here.
Subscribe here.

“I’m worried that what the Houthis did to push Yemen into a civil conflict in September 2014, the Saudis may end up doing again when they end their campaign by eliminating the Houthis.”
Photograph by Alex Potter
Article
The Speakeasy·

= Subscribers only.
Sign in here.
Subscribe here.

“In order to understand how Marty’s could survive as an institution, I returned a year after my first visit to spend a week at what was sure to be the world’s bleakest comedy club.”
Photograph by Mike Slack
Post
The Lost Land·

= Subscribers only.
Sign in here.
Subscribe here.

“I had first encountered some of these volumes—A Swiftly Tilting Planet, The Giver—as a child, and during adolescence, they registered as postcards from a homeland recently abandoned.”
Photograph by the author
Article
Wrong Prescription?·

= Subscribers only.
Sign in here.
Subscribe here.

“Whatever the slogans suggested, the A.C.A. was never meant to include everyone.”
Illustration by Taylor Callery

Estimated chance, worldwide, that a father is unknowingly raising another man’s child:

1 in 25

A Spanish design student created a speech-recognition pillow into which the restive confide their worries, which are then printed out in the morning.

The mayor of Sacramento filed for a restraining order against the City of Sacramento.

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

HARPER’S FINEST

Subways Are for Sleeping

By

“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”

Subscribe Today