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:

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

From the June 2014 issue

The Guantánamo “Suicides,” Revisited

A missing document suggests a possible CIA cover-up

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

United States Canada

CATEGORIES

THE CURRENT ISSUE

February 2015

The War of the World

= Subscribers only.
Sign in here.
Subscribe here.

The Sharp Edge of Life

= Subscribers only.
Sign in here.
Subscribe here.

The Great Republican Land Heist

= Subscribers only.
Sign in here.
Subscribe here.

Captive Market

= Subscribers only.
Sign in here.
Subscribe here.

The Day of the Sea

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
The Great Republican Land Heist·

= Subscribers only.
Sign in here.
Subscribe here.

“The wholesale transfer of public lands to state control may never be achieved. But the goal might be more subtle: to attack the value of public lands.”
Photograph by Chad Ress
Article
The Sharp Edge of Life·

= Subscribers only.
Sign in here.
Subscribe here.

“The struggle of the novelist has been to establish a measure, a view of human nature, and usually, though not always, as large a view as belief and imagination can wring from observable facts.”
Photo by Eddie Adams/Associated Press
Article
Captive Market·

= Subscribers only.
Sign in here.
Subscribe here.

"Fear of random violence lives on, but the reality is that violent-crime rates have dropped to levels not seen since the early Seventies."
Photograph by Richard Ross
Article
The Day of the Sea·

= Subscribers only.
Sign in here.
Subscribe here.

“Fifteen judges will then sit together in a wood-paneled room, in a city thousands of miles from the Andes, and decide whether the ocean Bolivia claims as its right will at last be returned to it.”
Photo by Fabio Cuttica/Contrasto/Redux
Post
Introducing the February Issue·

= Subscribers only.
Sign in here.
Subscribe here.

The Ruin of the West
Christopher Ketcham investigates Cliven Bundy’s years-long battle with the BLM, Annie Murphy reflects on Bolivia’s lost coast, and more
Painting by Richard Prince, whose work was on view in October at Gagosian Gallery in New York City © The artist. Courtesy Gagosian Gallery

Percentage increase in the annual number of polio cases in Pakistan since 2005:

857

A bowl of 4,000-year-old noodles was found in northwestern China; and a spokesman for the Chinese Academy of Sciences said that “this is the earliest empirical evidence of noodles ever found.”

A federal judge sentenced the journalist Barrett Brown to 63 months in prison for sharing a link to information stolen from the private-intelligence firm Stratfor by a hacker in 2011. “Good news!” Brown said in a statement. “They’re now going to send me to investigate the prison-industrial complex.”

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