EurasiaNet Business & Economics - Corruption Trial Concerning Kazakhstani Officials Delayed Until January

BUSINESS & ECONOMICS

CORRUPTION TRIAL CONCERNING KAZAKHSTANI OFFICIALS DELAYED UNTIL JANUARY
9/17/04

The federal trial of James H. Giffen, who stands accused of bribing Kazakhstani officials on behalf of an American oil company, has been postponed until January, allowing extra time for prosecutors, defense attorneys and the presiding judge to resolve questions concerning the presentation of evidence, including sensitive US government documents.

Following a recent judicial conference, US Federal Judge William H. Pauley III announced that Giffen’s trial is now expected to begin in early 2005, and not this fall as originally scheduled. The indictment against Giffen accuses him of making $78 million in illicit payments to two top Kazakhstani government officials, subsequently identified as President Nursultan Nazarbayev and former prime minister Nurlan Balgimbayev, in order to cement a $1 billion investment in the Tengiz oilfield for the Texas-based conglomerate then known as Mobil Oil Corp. [For background see the Eurasia Insight archive]. In the US government’s view, the payments allegedly violated the Foreign Corrupt Practices Act. But Giffen’s lawyers have argued that US officials sanctioned the payments out of a desire to encourage cordial US-Kazakhstani relations. "He was the man," asserted Giffen counselor William Schwartz of the financier once called "Mr. Kazakhstan."

During the conference, held in the United States District Court for the Southern District of New York, government lawyers sought to classify certain documents that they intend to use in their prosecution, effectively seeking the right to keep some evidence from Giffen’s counsel. Given the supposedly sensitive nature of some prosecution’s documents, it may be weeks before government agencies release them to Judge Pauley for his review. Pauley advised Assistant US Attorney Peter G. Neiman to expect questions. Neiman, who endured a tongue-lashing from the judge for hasty document submission in July, told the judge he would provide an explicatory letter summarizing the government’s case by September 23. [For background, see the EurasiaNet Business & Economics archive].

Also during the September 9 conference, prosecutors and defense lawyers discussed guidelines for classifying and unsealing documents. A government official also talked about "clearances" for witnesses. "It’s quite possible that there are materials [in the case] above the secret level," said Judge Pauley. Both sides agreed to schedule depositions in Switzerland for December, with cross-examination, anticipating a trial in January.

The Giffen case has so far centered on a question concerning the reach of US law. Defense lawyers have argued that US law cannot apply to foreign leaders’ actions in their homeland. Giffen’s indictment has been tied to a broader corruption scandal in Kazakhstan, known as Kazakhgate. Nazarbayev opponents have tried to use Kazakhgate to their advantage during the campaign leading up to September 19 parliamentary elections. The scandal, however, does not appear to have exerted much influence over electoral preferences in Kazakhstan. Public opinion polls show that support for Democratic Choice of Kazakhstan � the main opposition party that has tried the most to raise Kazakhgate’s profile during the campaign � remains mired in the single digits. [For additional information see the Eurasia Insight archive].

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