Publications

Drops on glowing rocks – 4
An excerpt from a new book by the author of the documentary bestsellers "Kazakhgate" and "Kleptocracy"

Sagandyk Mendybayev

An old anecdote told "with a Caucasian accent" has lately become very topical all of a sudden:

A Georgian: The Georgians are better than the Azeris.
An Azeri: Better in what respect?
The Georgian: I've told you, better than the Azeris.

The anecdote is rather stupid. But in recent months it has gained in meaning, and from "nationalist" it has turned into political. One can tell it in different ways now. For instance: The Georgians are better than the Ukrainians... The Georgians are better than the Kyrgyz... The Georgians are better than the Kazakhs... It's clear to everyone in what respect they are better. They are better because they were the first to do what other nations are just contemplating.

Hairs or successors?

This fall the specificity of national politics in the CIS countries has become especially apparent. From the historical point of view their models have been changing very quickly, as if in the kaleidoscope. For four years the Yeltsin-style departure from the political scene has remained the only option, and political scientists have been tirelessly looking for "successors" for their respective presidents. In Kazakhstan, this honorary though a little bit disparaging title has been in turn tried on all from Rakhat Aliev to Imangali Tasmagambetov.

Daniyal Akhmetov, the new Kazakh premier, nearly became the latest candidate for succession. But the model abruptly changed, and an Aliyev-style model came to replace the Yeltsin one. From that moment on, the talk was focused not on successors but on heirs. Central Asian presidents' offspring were elated and started to set up political parties. The political scientists started building their designs on the analogy.

In Kazakhstan where there are no sons, everybody's eyes were set on the daughter, Dariga Nazarbayeva. The pocket journalists and political scientists re-sharpened their pens anew and began to aggressively point out that their patroness had long ago earned a PhD in political science. In spring, she positioned herself as an opera diva, a fascinating and skittish lady in her early thirties. In fall, she suddenly emerged nearly as Hillary Clinton, indistinctly speaking about an "Eurasian model of post-authoritarian transit societies."

In volatile region, a new prosperity

By Hugh Pope, 21 November 2003, The Wall Street Journal

Mr. Nazarbayev's daughter, Dariga, dominates Kazakh media and flies with him on state visits. Mr. Nazarbayev said he had reluctantly blessed her founding of a political party. Asked if he wanted the kind of succession seen last month in the nearby ex-Soviet oil state of Azerbaijan, where, as in the Mideast state of Syria in 2000, a republican president was succeeded by his child, Mr. Nazarbayev didn't deny that it was possible.

"We are not a monarchy," he said. "We prefer that [the succession] will happen as in the Bush family."

In politics, like in the opera, Dariga Nazarbayeva seems to lack the sense of proportion. She has eagerly accepted the role of an heiress in spite of the fact that her father, unlike Heidar Aliev, is "rather alive than dead". This contradiction would undoubtedly result in her opposition with her father who is not going to go into coffin or coma. However, the Georgians have come to rescue and have made an Azeri model null and void.

The Tbilisi's "revolution of roses" has greatly impressed the long-serving CIS presidents. Kuchma, Nazarbayev, Akaev, and Karimov are trying the costume of "knight Eduard" on them and realize that they could hardly hope for such a mild way out of crisis. President Shevardnadze was a "white swan" compared to his colleagues, as he didn't jail opposition members, firebomb editorial offices or rewrite the Constitution to fit his needs. The only Georgian reporter who died for his criticism of a president was Igor Gongadze in Kiev who was killed by the order of President Kuchma.

Parallels with the Georgian scenario have inspired Kazakh opposition. They openly, though under their breath, have been agreeing upon as to who will be a Kazakh Saakashvili, Burdzhanadze or Zhvania. "Ak Zhol" schemes allow to suppose that Altynbek Sarsenbaev, an influential though not public and charismatic figure, would have to agree to the role of Zhvania. He is meant to chair a one-chamber parliament. Oraz Zhandosov would like to take on, and is widely believed to be able to cope with the task of a premier.

The question as to who will become the "01", a president with limited authority remains open; there are more than one contenders. Among those self-appointed to a certain degree are Alikhan Baimenov, Bolat Abilov, Berik Imashev. The list is far from full.

The situation with contenders within the Democratic Choice of Kazakhstan has become much easier after Mukhtar Ablyazov left the political stage. As soon as Galymzhan Zhakiyanov, the DCK's spiritual leader, is released, he will immediately become a presidential candidate. Assylbek Kazhakhmetov can play the role of Zurab Zhvania for Kazakhstan while Nino Burdzhanadze's part is being prepared for Tolen Tokhtasynov instead of Zauresh Batalova. The Party of Patriots appears to have its own plans, as well as a poky Civil Party with Azat Peruashev intending to hold as many as three offices.

I will come as no surprise if Dariga Nazarbayeva, so open to tendencies, would imagine herself as a person who would led popular uprising with a red rose in her hand standing on the porch of her father's residence in Astana.

The Georgian experience, however, will unlikely work in Central Asia, at least due to subjective reasons: both dictators and oppositionists are different here.

The effect of Georgian revolution on the region

Radio Freedom, December 2, 2003. Host: Tengiz Gudava

Oleg Panfilov: Several days ago, I attended an OSCE Conference in Paris where I met representatives of Kazakhstan who were not concealing their elation. They were either the opposition members or their supporters. Many of them, however, acknowledge that both in Kazakhstan and Kyrgyzstan the societies are not prepared for the developments like those that took place in Georgia.

The conference participants all watched live CNN and BBC reports and saw Saakashvili and Burdzhanadze speaking good English, and Saakashvili speaking also French. I.e. opposition members in Georgia are much better educated than opposition members in other CIS countries. This is my personal impression.

Tengiz Gudava: Apparently, despite the good envy, despite the positive attitude towards Georgian developments, you shouldn't expect a chain reaction and a domino principle in Central Asian and Caucasian regions. Isn't there a danger that the desire to hold on to power at any cost would boil the situation and would result in a social explosion, and the revolution won't be as bloodless?

Oleg Panfilov: I fear, yes, such scenario of a violent uprising is quite likely for Central Asia indeed, especially as Shevardnadze's intellectual level and experience differ from those of Central Asia leaders. We should give president Shevardnadze his due because he didn't resorted to force to resolve the conflict. I am afraid the leaders in Central Asia will use military force against their societies and their citizens first of all.

Supporters of the opposition shouldn't despair, as this fall has offered us one more model of power transfer - a Lithuanian one. Strange as it might seem, it fits the Kazakh situation much better. These two geographically and culturally remote countries are alike due to large-scale international scandals involving their presidents.

The howling shame

For several years already the Kazakhgate scandal has been unfolding in Almaty and New York increasingly implicating president Nazarbayev, ex-premier Balgimbaev, their family members, and (first of all) their veteran oil adviser James Giffen. In Lithuania, Paksasgate has been concentrated around president Rolandas Paksas alone who is accused of connections, via his close friend and adviser Yuri Borisov, with Russian secret services, on the one hand, and with Russian organized crime on the other hand.

Lithuanian president didn't take bribes. He just allowed Yuri Borisov to donate $1 million to his election campaign and illegally made Borisov a Lithuanian citizen. Borisov was also promised a post in the President Administration, a title of a General, and an order.

Those who are familiar with the story of James Giffen and Nursultan Nazarbayev can't help seeing some coincidences. Here we also have an adviser who has been granted an order and personal friendship. The same active participation in the election campaign. It is a well-known fact, that the American adviser paid the bills of PR companies in Washington, D.C. who in the run-up to the presidential elections instructed the president how to explain the disappearance of rivals, firebombing of newspaper offices, and attacks on political opponents.

In Lithuania, the president's behavior was considered intolerable for non-political reasons: the Lithuanians are ashamed. They are ashamed of their president who has mired in shady contacts. They would like to be proud of their president, but they cannot be proud of Paksas. Thousand of demonstrators came to the residence of their head of state to chant, "Shame! Shame!" They hope Rolandas Paksas will die of shame and resign on his own initiative.

Pressure on the president

Hannes Gamillscheg, Frankfurter Rundschau, December 4, 2003

To enter the EU or NATO with the head of state who has to give explanations in court and prove that he has no ties with the criminals seems abominable to most of the Lithuanians. So Rolandas Paksas has been facing an increasing pressure, he is urged to resign voluntarily.

The charges brought against the former pilot and flight master Paksas are so impressive that demonstrators, mass media and political figures almost unanimously demand that he tender his resignation.

The impeachment process will take the whole the spring and will end after May 1, the date set for the Lithuania's entering the EU. The Lithuanians could have to celebrate this holiday with the president who is charged with complicity in arms smuggling, money-laundering and sponsoring terrorists, as well as divulging state secrets, which could be prevented exclusively by Paksas if he resigns voluntarily.

Kazakh opposition members of all wings should focus on studying the Lithuanian experience rather than Georgian one. The political temperament, the aesthetics of social life do not belong Central Asia. But shame is a universal human feeling. Despite the cultural and political disparities between the two countries, Kazakh citizens are also ashamed of the fact that their president run snowmobiles and boats paid for by the ill-gotten funds. They are ashamed that his wife Sara wears fur coats and jewelry received as a result of bribe-taking, that tuition of his younger daughter Aliya was paid from grafts. They are ashamed of the multimillion transfers that were secretly made into a Swiss bank account of his second daughter Dinara. That his elder daughter Dariga paid ill-gotten funds for the NTK TV channel.

Nursultan Nazarbayev accused

Evgenia DYULO, The Eurasia Journal, November 18, 2003

Meanwhile investigators of the Geneva Canton seized accounts owned by Nazarbayev, premier Balgimbaev, their family members and cronies. Giant sums (over $100 million) were transferred into the accounts by the U.S. corporations producing oil in Kazakhstan. Suspecting that the oil companies had bribed president Nazarbayev and members of the Balgimbaev's Government in such a way, the U.S. Department of Justice has opened investigation dubbed Kazakhgate, which is currently considered by a federal court in New York.

In Switzerland, Nursultan Nazarbayev does not face any formal charges yet - this could occur only when the U.S. court says the sums in his accounts are ill-gotten. So Swiss judicial authorities are unable to demand detention of the Kazakh president. However they can subpoena him for questioning and then report the findings to international organization and the Interpol.

The Kazakhs are to experience a new shame attack soon. This will happen in January, 2004, when the federal court in the Southern District of New York will start preparing to hear the case of bribing Kazakh state officials, which involves agreeing upon the lists of witnesses for defense and prosecution, selection of the jury, etc. According to the informed sources that have never let down the author the hearings will start on October 4, 2004.

This day will definitely become a milestone in history, as since the moment the prosecutor reads the indictment, Kazakhstan will find itself among the "outcasts" whose heads of state can not hope to sit at the table with respectable presidents.

This has happened to Rolandas Paksas, though his misdeed is a far cry from the Kazakhgate with its scale.

Non-permitting weather for the president

Vladimir SKRIPOV, Vremya novostei, December 5, 2003

Yesterday, Rolandas Paksas declared that he would stay in office for another 9 years which means that he is going to head the country for two tenures. As journalists learnt immediately after his declaration, he had an unpleasant talk with the U.S. Ambassador Steven D. Mull. After the talk with him, Paksas said he would not go on a visit to the United States scheduled for December 7-9, though a day earlier he said the opposite in public. Paksas' foes have regarded this as the evidence of the president's defeat.

It is easy to imagine how the U.S. administration would feel when it becomes obvious that these hard days a country that possesses strategic oil reserves is headed by the official formally named by U.S. court an accomplice in a large-scale corruption scheme also involving the pillars of the U.S. business, the oil majors ExxonMobil, ChevronTexaco, and PhillipsAmoco.

Rich in oil, poor in everything else

By Anthony Richter and Svetlana Tsalik, The New York Times, December 5, 2003

Adding more unstable regimes to the pool of oil suppliers will not give the United States energy security. It cannot be guaranteed by regimes that are on the verge of being toppled or that rely on repression to stay in power. American energy security can come only through partnerships with legitimate, elected governments that are able to translate oil wealth into better lives for their citizens.

It's easy to see how the Caspian Basin could follow the path of so many oil-producing countries in the Middle East and Africa, where a corrupt elite, not the population, benefits from oil resources. But Azerbaijan and Kazakhstan, where the oil wealth is just beginning to flow, and Iraq, where an oil regime is not yet established, could still get it right.

Virtually all U.S. oil producing companies working in Kazakhstan have soiled their hands with multimillion payments into N. Nazarbayev's accounts. To welcome this man in Washington, D.C., to sit at the same table with him and to shake hands with him will be a disgrace for president Bush who has worked up a reputation of a consistent fighter against corruption in the U.S.

Undoubtedly, if the Kazakh opposition members, like their counterparts in Lithuania, come out holding a banner with just "Shame on you!" the U.S. ambassador to Kazakhstan would meet with Nursultan Nazarbayev in Almaty to bring home to him the moral aspects of this case, which the president fails to see. In any case, he would ask the president to refrain from frequent overseas trips.

Well, what next, the impatient reader would ask. After that James Baker, an experienced diplomat and yet another U.S. friend and adviser to Nursultan Nazarbayev, will join the game. Representatives of the OSCE, various NGOs, senators, observers, CNN reporters will come to Kazakhstan on the eve of local parliamentary elections…

U.S. urges credible vote in Central Asia

By George Gedda, AP Asia, November 26, 2003

The Bush administration is telling four Central Asian governments that their stability may hinge on the credibility of elections each one will hold within the next two years.

That message was taken in recent days to the leaders of Uzbekistan, Kazakhstan, Tajikistan and Kyrgystan by the State Department's top official for European and Eurasian affairs, Beth Jones, and its chief human rights official, Lorne Craner.

U.S. officials who briefed reporters on the trip Wednesday said the leaders of the countries were told that security and stability come with the enfranchising of their respective peoples.

In discussing the situation in Georgia, the officials said the United States pushed hard for a free and fair process in parliamentary elections that were held last month.

Instead, the process was marred by a fraudulent vote count, outraging Georgians and forcing the resignation of President Eduard Shevardnadze over the weekend.

The administration drove home its point about the need for a clean election by dispatching former Secretary of State James A. Baker and Sen. John McCain, R-Ariz., on separate visits to Tblisi with that message.

Ostriches and eagles

Looking at Nursultan Nazarbayev's behavior in view of imminent historic challenges, one could suspect that he is somewhat, to put it mildly, inadequate. His behavior is so absurd, his speeches are so incongruous when he starts speaking about the Kazakhgate scandal. As a result, influential U.S. advisers and previously his well-wishers have even absolutely refused to maintain business contacts with the Kazakh president.

Robert Straus, the former U.S. ambassador to the USSR and an influential lobbyist and lawyer, has terminated his contract with Kazakhstan, accompanying this action by some remarks about the head of state whom he literally ushered to the White House for the first time.

Robert Strauss is known to have suggested in the context of the Kazakhgate that Nazarbayev cooperate with the U.S. investigation and do not attempt to blanch over J. Giffen whose game is lost. But Nazarbayev behaves in quite the opposite manner.

In volatile region, a new prosperity

By Hugh Pope, 21 November 2003, The Wall Street Journal

Meanwhile, scandals have clouded the country's economic success. Mr. Nazarbayev said he "paid no attention" to a recent U.S. indictment of his former American adviser on oil deals, investment banker James H. Giffen, who allegedly directed a bribery scheme. U.S. prosecutors also are looking into $78 million paid by oil majors into Swiss bank accounts, including one in the president's name. "American companies should be grateful [to Giffen] because he brought them to Kazakhstan," Mr. Nazarbayev said.

One would have admired the principles of the president who does not sell out his associates, if his whole career had not proved the opposite. He has climbed the ladder as a result of a series of foul play acts, including the betrayal of Dimash Kunayev, his principal benefactor and the former communist boss of Kazakhstan.

To sell out his associates, to give up his friends, to fling dirt at the outgoing person is just a norm for Nursultan Nazarbayev. Hardly anyone would feel too bad about this: he is only human after all, and he is also a politician and an apparatchik. His devotion to Giffen is based not on a sentimental loyalty, but on fear. The Kazakh president is afraid of his advisor who has been restricted to his New York estate attached by law-enforcement officials in anticipation of the forthcoming trial.

Judging from Nazarbayev's illiberal demonstration of emotions, this fear is more irrational than rational. What else could the president fear after all those publications? What else could Giffen tell at the trial that the global community has been unaware of? His bank accounts have already been disclosed, the amounts stashed in banks counted, the fur coats and snowmobiles attached. The public even knows that the U.S. adviser supplied his clients with piles of Viagra pills...

Answers to these questions could be found in the depths of personal relationships of Giffen with Nazarbayev. The president is dependent on his adviser so much that he brushes aside any schemes of crisis resolution that involve an end to support for J. Giffen.

Cooperation with the U.S. Justice Department is known to be the easiest way to settle the Kazakhgate scandal, at least on the foreign policy front. Suspecting that the likelihood of this version is great, Nurlan Balgimbayev first rushed to leave for some warm countries nearby for a lengthy treatment. However, recently he has permitted himself to get back to Kazakhstan to pompously celebrate his birthday.

Unlike ex-premier Balgimbayev, J. Giffen does not mistrust Nazarbayev. He is positive that the president would just been unable to give him up. A gruff funny story springs here to mind about a cowboy Bill who stood at the bar ignoring the insulting words uttered by his adversary who stood very close to him. "Why don't you answer him, Billy," asked his friends who sat at the tables. "You are a cowboy, aren't you?! Don't you have the balls?!" "I've got the balls. But my balls are now in someone else's hands," answered Bill in a constrained voice.

We have grounds to suspect that J. Giffen is standing very close to N. Nazarbayev not only because of the latter's constrained voice when he has to speak about the Kazakhgate, but also because of the sensational news that J. Giffen's son David continues to work for Kazakhstan in the capacity of a consultant employed by the state-run corporation Kazmunaigaz controlled by the Nazarbayev family.

Kazakhstan rehires subject of probe

By Christopher Pala, The Washington Times, December 4, 2003

The government has rehired a man awaiting trial in U.S. court on charges of funneling $60 million in kickbacks to President Nursultan Nazarbayev, according to Western oilmen in Almaty.

Eight months after James Giffen was indicted in a New York federal court, his New York-based pocket merchant bank, Mercator Corp., is back helping the oil-rich central Asian nation negotiate deals with major oil firms.

According to sources familiar with the talks, Mr. Giffen is represented at the negotiating table by his son, David, in high-stakes talks with a consortium developing the giant Kashagan oil field. He is officially described as a "consultant" to Kazmunaigaz, the state oil company, which also regulates the industry.

Sources close to the negotiations said ExxonMobil executives have expressed displeasure at having to face Mercator at a time the oil giant is under investigation for its payments to Mercator.

Mercator's return to business in Kazakhstan was, one well-informed lawyer said, "rather curious, given earlier statements in the litigation made by Kazakhstan distancing itself from Giffen. It shows that Giffen continues to exert a lot of influence at the top."

The indictment charges that Mobil deposited $51 million in Mercator's New York account, of which $22.3 million ended up in the Swiss account of Orel Capital Ltd., a British Virgin Islands company controlled by Mr. Nazarbayev. Orel is the Russian word for eagle, the national symbol of Kazakhstan.

Mr. Giffen is also accused of funneling $7.5 million paid by Philips Petroleum, now ConocoPhilips and a party in the current negotiations, into the Swiss account of Berkut Holdings Ltd., another BVI corporation reportedly controlled by Mr. Nazarbayev. Berkut means eagle in Kazakh.

Brushing aside somewhat inaccurate translation of the word "berkut", we can't possibly ignore David Giffen who has emerged on the Almaty arena. This in itself speaks volumes. It testifies to the fact that Giffen has been blackmailing the Kazakh president demanding that the latter put all state resources at stake, including the oil reserves and the strategic contacts, in order to release him. Otherwise he would drown his former boss together with him. Looking forward to the trial in limp horror, N. Nazarbayev yields to the demands of the blackmailer and awkwardly defends him in the hope that Giffen would not give away his former boss in return.

One could even admire J. Giffen's nerve. A man in years, he has been fighting for his life like an eagle. Or a berkut. But the attitude of N. Nazarbayev and his family members reminds quite a different bird who in a moment of danger puts its head in the sand, setting out its lower back above the ground.

Dariga Nazarbayeva answers readers' questions

Internet newspaper "Navigator", December 3, 2003

Q: Can you tell anything about the Kazakhgate scandal. Is the president really involved in this case?

A: This case implicates former adviser to the president, a U.S. citizen, who has done much for the development of our economy. In various years, the president has had many foreign advisers from many countries. Those people were of great help to him. They helped him to enter the influential financial, industrial and political circle. Many economic reforms were carried out with their direct assistance. I presume we have no reasons to be ungrateful to them. However, control of the relationship of his foreign advisers with Themis in their respective countries is beyond our president's scope. The man in question is charged with tax evasion in the United States. He is awaiting trial. Everything else is no more than a political speculation.

Not only the vocalist and political scientist but also the president himself seem to be unable to believe that the reason behind the entire scandal is not that G. Giffen just failed to pay taxes. The Giffen-Nazarbayev-Balgimbayev case is sensational because for the first time in many years a person is facing charges for violation of the law that directly prohibits bribing foreign officials to gain or keep business. For the first time this case implicates the president of a sovereign state.

What makes the situation even more serious is that J. Giffen has no more means to help N. Nazarbayev or bring him to ruin. Nothing depends on the main defendant in the forthcoming trial in New York any longer. The Kazakh president is afraid of Giffen because he is unable to realize the latter has nothing to conceal and nothing to expose any longer.

"Mr. Kazakhstan", as he was enviously dubbed by his colleagues investors, J. Giffen had "let down" his Kazakh bosses and accomplices when he scrupulously documented the financial side of all the bribes and kickbacks, putting down in his books the sums and addressees of wire transfers or payments in cash. This appears to be the reason why the investigators have not offered Giffen to consider a plea bargain as it was the case with Brian Williams, the vice president of Mobil, who received from Kazakhstan kickbacks for the contracts.

Being in possession of hard evidence, prosecutors of the Southern District of New York have no need to negotiate a plea bargain with J. Giffen. He would receive a severe sentence under the bourgeois law, not unlike the sentence recently received by far more influential figures of the U.S. economy.

Since the Mercator's entire three hundred thousand documents were seized by a Grand Jury decision two years ago and were carefully studied by the prosecutors, little depends on Giffen's statements. The jury won't have to puzzle their brains over the reason behind the purchase of two fur coats worth of $34,000 each. Clearly to prevent Sara Nazarbayeva and Dariga Nazarbayeva from freezing in the Astana snow.

(To be continued…)

A month ago, after a third except from my future book was published, a Kazakh paper contacted me for an interview. As this newspaper is widely believed to be the best in today's Kazakhstan, I agreed to answer the questions of its editor. I even suggested that he publish this excerpt together with the interview. The paper has just to okay the publication with some person... They have been agreeing this upon for some time already. Who is that person, I wonder?

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