Briefing of a Kazakhstan affair

James Giffen (1), an American banker and consultant of the Kazakhstan’s President, is due to face justice in USA. He is accused of bribing (2) with some 78 million USD the Kazakhstan leadership in order to secure contracts for the “big oil” corporations of the United States. Giffen is not your ordinary banker. As New York Times point out (3), “His case involves a labyrinthine trail of international financial transfers, suspected money laundering and a dizzying array of domestic and overseas shell corporations. The criminal case names Mr. Nazarbayev as a non indicted co-conspirator”.

In early 2003 Federal Agents arrested (4) Giffen, just the time he was preparing for his trip to Paris –A permanent one it seems-. He was accused of systematically bribing officials of the Central Asian state and acting on behalf of Exxon Mobil, BP and Conoco-Philips. Despite the accusations against him, paradoxically the companies were not charged (5) for their practices. Giffen now, after consulting his legal team decided to request the declassification of Government documents (6) in order to prove his innocence, as well as, his patriotic stance as an individual acting under governmental initiative and influence.

The documents made public reveal to an extent the interrelation of the state officials in assisting Griffen’s Asian endeavors. Moreover, Giffen before becoming an international advisor of President Nazarbayev (7), he was the Vice President of Armco (8), an enterprise selling oil drilling equipment to the Soviet Union back in the 70’s. Thereafter he became the Chairman of Mercator, a consulting company that developed strong ties with the last Soviet President, namely Gorbatsov. His road to business success was on its peak when under the Bush Senior Administration he was appointed as the Head of the American-Soviet Commercial and Economic Council (9). Giffen has hinted that his role was not an auxiliary one, but acted as a middle man in American investments in the Soviet Union that may have involved the bribing of Gorbatsov himself!

During the 90’s the American Administration kept a blind eye to the human rights violations of Kazakhstan’s regime, because of its abundant reserves of hydrocarbon fuels. The last decade saw also, Phillip Zelikow (10) current aide of the State Department; as a scientific advisor for Mr. Griffen’s conducts with Kazakhstan, in issues of economic development of the state.  The American banker was the culprit of important deals in Central Asia such as the buyout of 25% of the Tengiz oil(11) field by Mobil in 1996. This particular field produces 285,000 barrels of oil per day, a third of total Kazakhstan production currently. For this deal, a 51 million payoff was needed. Half of that amount went into Griffen’s pocket, whilst the rest was sent to Swiss bank accounts that apparently are owned by members of the Nazarbayev family. Furthermore during that period numerous gifts were handed out by Giffen to the head of the Kazakh state. Those include furs worth 30,000 USD-For the first Lady and the First Daughter-, and an expensive speedboat that was consequently given by the President to his Prime Minister, Balgimbayev (12).

The above story is a typical paradigm of “Kleptocracy” (13) a newly coined term that points out to the enormous state of corruption the modern business & political world has come into. The existence of brutal regimes all over the oil rich states is being facilitated by the ongoing corruption practices of the oil industry –regardless nationality- and the outcome quite predictably is social unrest and violence on a global scale. Dick Cheney (14) once the head of Halliburton (15) noted that “It’s not our fault that oil isn’t produced in democracies…” To that one has to point also the dependence of the Western consumer states by oil that is greatly assisted by corruption and easy-going deals between business executives and dictators over the world. In an era where the world should be moving to a fossil fuel free economy, the oil industry clings to its practices and holds governments and their respective administrations liable of political misdemeanors. It is easy to assume that large foreign investments by USA corporations would have a political back-up, which intermingles corrupted business practices with mainstream politics. The effect quite naturally is the degradation of political life and Democracy itself.  Finally the result in a global scale is quite the contrary than Cheney’s quote. It is the oil that creates dictatorships so as to facilitate agreements not acceptable in a state governed by the rule of law.
On overall, the Giffen’s case reveals yet once more the hypocrisy of the international community when dealing with oppressive regimes, as well as, the influence of the colossal transnational corporations in world politics. An interesting fact for the aforementioned is the 2 billion USD that has given from the World Bank alone from 1992 to 2006 as an aid (16) to Kazakhstan. 130 million of these were handed out last year, after the exposure of the Giffen scandal, and under Paul Wolfowitz (17) a long lasting member of the “World elite”.
An element of optimism at least, is the existence of Kazakhstan as a worldwide business centre, quite a different approach by the recent “Bhorat” film that surely didn’t grasp the complexity of kleptocracy, dictatorship and Swiss bank accounts, in a land that apart from rare species of wolves (18), has plenty of oil to share!














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