Kazakh scandals throw spotlight on
democracy
PRAGUE, Czech Republic--Allegations of corruption at all levels
dominated the Kazakh news this week. In a scandal that raises numerous questions about the
role of U.S. oil companies in the region, and how Washington’s interests in oil and
democratization co-exist, the governor of the Kazakh National Bank came out on 17 April in
support of President Nursultan Nazarbaev's decision to divert more than $1 billion into a
secret national oil fund.
That same day, the country’s interior minister criticized his own
ministry’s efforts to stamp out corruption, saying that it was chasing little fish. He
went on to say that corruption is endemic within the police; 541 policemen were sacked for
abuse of office in 2001. His statements came just days after the former Kazakh
transportation minister, Ablay Myrzakhmetov, announced plans to take the Prosecutor
General's Office to court on corruption charges.
Indeed, corruption has been the keyword in Kazakhstan over the past
month. In late March, the government said suspicion of embezzlement was the reason it had
tried to arrest two leading members of the opposition. Mukhtar Abliyazov was seized on 27
March, and Ghalymzhan Zhaqiyanov only managed to evade police by entering the French
embassy in Almaty, the Kazakh capital, on 29 March.
Claiming the charges were trumped up, and being used to justify
political repression, the opposition called a protest rally. The rally was to have been
covered live by the independent television station, TAN TV, a station Abliyazov had helped
set up. But before its cameras could roll, its offices were attacked by unidentified
gunmen. On 28 March, the attackers opened fire, destroying broadcasting equipment.
Like Zhaqiyanov, Abliyazov was a founding member of the Democratic
Choice for Kazakhstan (DVK), which was established last November. The attempt to arrest
Zhaqiyanov came several days after his trip to Paris, where he visited Akezhan
Kazhegeldin, the leader of a large Kazakh opposition movement, and four days after
Kazhegeldin, a former prime minister, had issued a three-point plan to push through
democratization in Kazakhstan. In September 2001, Kazhegeldin was sentenced in absentia to
10 years hard labor for corruption. The opposition said the trial was a farce.
On 16 April, at a forum of political parties, a representative of the
Kazhegeldin movement, Forum of Democratic Forces (FDS), argued that the current crisis in
Kazakhstan is part of a broader crisis in authority. Representatives of the government
said it is part of the country's maturing political process.
On 29 March, President Nursultan Nazarbaev unveiled a plan to create a
commission to oversee corruption cases.
But within days, the government found itself defending how it used oil
revenues. One of the three priorities created by Kazhegeldin was the creation of a
People’s Oil Fund that would be used to prevent the current leadership of Kazakhstan
from siphoning off oil revenues. On 4 April, the relatively new prime minister, Imangali
Tasmagambetov, admitted to parliament that the Kazakh authorities had created a secret
fund in which to park revenues from the sale of a 20 percent stake in the Tengiz oilfield,
and indicated that the president could have foreign bank accounts in his name. The
National Oil Fund held $1 billion.
Tasmagambetov tried to defend the fund (it had, he said, helped to keep
Kazakhstan’s finances stable), and deflect accusations being hurled at Kazhegeldin,
under whose premiership the fund was allegedly established.
On 17 April, the governor of the Kazakh National Bank, Grigorii
Marchenko, insisted that the creation of a secret fund "was the right decision from
the economic point of view," according to Interfax-Kazakhstan. However, why money
allegedly used to pay off pension arrears and shore up the budget was transferred to a
secret account in Switzerland is unclear. Some residual sums were then sent back to
Kazakhstan into a fund managed by the central bank. Money was last returned to the central
bank on 15 April. The Swiss authorities have frozen the bank accounts supposedly held by
Nazarbaev. The president maintains, however, that he has no bank accounts abroad.
Nonetheless, Eurasianet reports that he is trying to persuade the Swiss government to
unfreeze the accounts.
Kazhegeldin called on international oil giants with interests in
Kazakhstan to support the creation of a People’s Oil Fund. However, as Eurasinet.org
pointed out in an article called “The Elephant in the Living Room” on 26 March, U.S.
oil giants are heavily implicated in the scandal over secret funds. The Tengiz oil field
is now majority-owned by ExxonMobil and Chevron. Following an article by Seymour Hersh in
the July 2001 issue of The New Yorker, ExxonMobil has been implicated by two grand
juries in the United States over its dealings with Nazarbaev and alleged breaches of
sanctions on Iran.
In the article, “The Price of Oil,” Hersh wrote, "Mobil
participants in the Tengiz negotiations worried constantly about the possibility of
payments going astray. [The Mobil executive] Don Voelte told me that the company was
concerned that the purchase payments it was sending the Kazakh government via Swiss banks
might be diverted for personal use by the Kazakh leaders."
Mobil also stands accused of swapping oil with Iran as a means of
getting oil from the Tengiz field onto world markets in 1997. This would have contravened
the 1996 Iran Trade Sanctions Act. Kazakhstan is currently working on building a pipeline
that would lead westward and bypass Iran.
In July 2001, the U.S. government task force on energy issues, headed
by Vice President Dick Cheney, urged its government agencies to “deepen their commercial
dialogue” with Kazakhstan. On 27 February 2002, U.S. courts asked the U.S. Department of
Energy to release the minutes of certain meetings. On 13 March, President George Bush
refused to turn over the notes. This case, just like the Enron bankruptcy, raises tricky
political questions for the Republican establishment about funds ExxonMobil donated to the
party and its senior figures, including U.S. Attorney General John Ashcroft.
--compiled by TOL
Transitions Online, April 16-22, 2002 |