- Current Issue
SIGN IN to access Harper’s Magazine
Need to create a login? Want to change your email address or password? Forgot your password?
1. Sign in to Customer Care using your account number or postal address.
2. Select Email/Password Information.
3. Enter your new information and click on Save My Changes.
Subscribers can find additional help here. Not a subscriber? Subscribe today!
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.
More from Scott Horton:
No Comment — November 4, 2013, 5:17 pm
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
How will the Obama Administration handle Edward Snowden’s case in the long term?
No Comment — July 29, 2013, 11:36 am
Is it possible to simply disband the partisan FISA court?
Percentage of African countries in which it is illegal to practice homosexuality:
Americans consider orange cats to be friendly, tortoiseshell cats to be intolerant, and white cats to be aloof.
In Norfolk six black-tipped reef sharks, a bonnethead shark, a bowmouth guitar shark, six penguins, and a green sea turtle were evacuated from the Hunstanton Sea Life Sanctuary because of flooding.
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
Notes on South Africa’s failed revolution
“I will never know what goes on in your mind, or what that shield of a smile behind which we try to advance should tell us.”