Defense Lawyers Argue US Law Does Not Pertain to Kazakhstani Bribery Case

Lawyers for James Giffen, the American merchant banker facing charges of bribing top Kazakhstani government officials, accused the United States of "legal imperialism" during a June 3 pre-trial hearing. US law does not apply to Giffen's actions since they occurred in Kazakhstan, the banker's defense team argued.

During the hearing, defense lawyers pushed for a dismissal of the case against Giffen, who is facing multiple counts of violating the Foreign Corrupt Practices Act. [For background see the Eurasia Insight archive]. Giffen, according to the federal indictment against him, allegedly funneled over $78 million into bank accounts controlled by President Nursultan Nazarbayev and former prime minister Nurlan Balgimbayev to facilitate energy-development deals in the mid-1990s between Kazakhstan and Mobil Oil Corp., which is now part of ExxonMobil. [For background see the Eurasia Insight archive]. The case is viewed as politically explosive in Kazakhstan. [For background see the Eurasia Insight archive].

William J. Schwartz, a lawyer for Giffen, insisted that his client's actions fell outside of US legal jurisdiction, adding that in bringing the charges against the merchant banker, US prosecutors were attempting to equate American law with "natural law." US prosecutors argued that Giffen's actions were designed to benefit individuals, and not the state of Kazakhstan, thus enabling US law to apply. "If we can prove that what was going on were actions to benefit individuals," Assistant United States Attorney Peter Neiman said, "the defense is not entitled to summary judgment."

US Judge William H. Pauley III made no ruling on the question, but he appeared to acknowledge the validity of Schwartz's claim. At one point Pauley asked a government prosecutor: "What would you have me tell a jury about the duty of Kazakh officials to the Kazakh citizenry ... assuming there is a concept of citizenry in Kazakhstan?" The two sides are expected to revisit the jurisdiction issue in a future conference. Pauley has tentatively scheduled a conference for July 29.

If the case goes to trial, which is tentatively scheduled to begin October 4, Giffen's lawyers indicated that they would base their defense on a contention that the merchant banker was acting as a government agent, who had to do "whatever he had to" to retain the trust of Kazakhstani officials. Lawyers then argued over whether Giffen's "state of mind" could render him innocent of corrupt acts.

Giffen's team said they would seek to show that Giffen, starting in 1992, had worked closely with the Central Intelligence Agency, National Security Council, and Department of State. The lawyers went on to suggest that Giffen, in his dealings with Kazakhstani officials, took actions based on his belief that he was an agent of the US government, which supposedly wanted him to promote national interests by maintaining a cordial relationship with Kazakhstani officials.

"The United States was very interested in exploiting his [Giffen's] closeness [to Nazarbayev and other Kazakhstani officials]," asserted Schwartz. The lawyer said that there was documentary evidence that Giffen had intervened on the United States' behalf to discourage Kazakhstan from selling advanced weapons to North Korea and Iran. Schwartz also invoked national security concerns. "Kazakhstan is in the center of the tinderbox of the former Soviet Union," Schwartz told the judge. "Mr. Giffen was the man. And the government knew he was the man, and exploited him."

Schwartz went on to argue that the defense needs to see all official US documents pertinent to the government's dealings with Giffen since 1992. He said the CIA and State Department were withholding some of those documents on national-security and foreign policy grounds. Neiman, the government's lawyer, said the broadness of the defense's request could "put the case on ice" for an extended period of time.

Before the nearly two-hour hearing was adjourned, Neiman told the judge of his plans to depose two foreign citizens – employees of a Swiss bank – who could help trace the flow of the alleged bribes through a web of Swiss accounts. Foreign depositions would be necessary, Neiman said, because some prospective witnesses expressed fear about coming to the United States to offer evidence in the case. Schwartz argued that the defense would have no fair chance to prepare if depositions were taken shortly before the scheduled October 4 trial date. "Keep your summer open for a trip to Europe, or Kazakhstan, or