Two prominent US senators are pressing the Bush administration for details on a federal grand jury investigation, which, according to the legislators, may involve illicit payments made by an American company to members of Kazakhstan's government.
A federal grand jury in New York has been hearing evidence for two years in the case, which is centering on possible violations of the Foreign Corrupt Practices Act (FCPA). The case is under seal, meaning no specific details in the case have been released for the public record.
In a November 19 letter, however, Sen. John McCain, Republican of Arizona, and Patrick Leahy, Democrat of Vermont, called on US Attorney General John Ashcroft to provide an update on the US government's findings in the investigation. The McCain-Leahy letter expressed concern about the possibility that the investigation centers on improper payments made to top Kazakhstani officials.
"We would appreciate your update on the status of the [Justice] Department's investigation, including when you anticipate federal charges may be brought against the alleged perpetrators of bribery in violation of the FCPA," the McCain-Leahy letter to Ashcroft said. "Apparently, the scope of the investigation involves improper payments to members of the government of Kazakhstan by US oil interests."
"We feel strongly about this case in particular because of serious allegations of systemic human rights abuses in Kazakhstan and the possibility of improper assistance by US corporations to members of the Kazakh government," the McCain-Leahy letter said.
On September 11, 2002, the New York Daily News reported that a US District judge in the Southern District of New York issued a decision that will allow the grand jury to continue to hear the case. According to the ruling, US Judge Denny Chin said the grand jury is entitled to review more than 300,000 pages of documents concerning the case. None of the entities or individuals connected with the grand jury investigation has been publicly identified.
It is expected that the Justice Department will respond to the McCain-Leahy letter, but it is less clear if federal indictments will be forthcoming, or if the US government will say the investigation is ongoing. Several US experts said that, given the political influence of the senators, the Justice Department has little choice but to respond to the letter. But, they added, they didn't expect the Bush administration which has gained a reputation for strongly resisting scrutiny of its policy-making processes to reveal many details about the case.
"It would stun me if Justice doesn't have a response by December 16," says Stuart Gilman, president of the Ethics Resource Center, a Washington, DC-based nonprofit, specializing in government and business ethics. "Justice has been slow in processing a number of high-profile cases, but this investigation doesn't look like it's closed, which means there is an ongoing investigation by the FBI and Justice. But even if there is a response by Justice, don't expect much detail."
Other experts say the response, even if it contains little specific information about the case itself, could provide clues on Bush administration policies towards Central Asia. "How they are going to respond is an important signal on the future of US policy going forward in Kazakhstan and the Central Asian region," says Pauline Jones Luong, a Central Asian expert and a political science professor at Yale University.
"If the Bush administration delivers a harsh response to the letter it will indicate it's taking a strong stance on human rights and economic reform. But there are tradeoffs between security and reform, and security seems to be in the forefront right now," Jones Luong added.
A corruption scandal in Kazakhstan, known as Kazakhgate, emerged in 2002 as a touchstone of an intense domestic political struggle between President Nursultan Nazarbayev and his opponents. Leaders of Democratic Choice of Kazakhstan, the main opposition movement, have announced that they intend to carry out a campaign to publicize details of the scandal. They have accused government leaders of taking millions of dollars in bribes from Western oil concerns. [For additional information see the Eurasia Insight archives].
In April, Kazakhstani Prime Minister Imangali Tasmagambetov announced the possible existence of secret Swiss accounts in the president's name. But he claimed that former prime minister Akezhan Kazhegeldin, now a leading opposition figure, was responsible for establishing the secret account. The president, Tasmagambetov stressed, had no knowledge about the establishment of a possible slush fund. [For background see the Eurasia Insight archive].
There is no way at present to determine what, if any, connection the US grand jury investigation has to the Kazakhgate scandal. Some experts say the US probe could last for years. "These investigations often take a very long time, so two years isn't an aberration. There are complex factual and evidentiary issues crossing multiple jurisdictions, making it very difficult getting to officials of foreign governments and private companies," says Jeffrey Bialos, executive director of the Program on Transatlantic Security and Industry at the Center for Transatlantic Relations at John Hopkins University's School of Advanced International Studies.
How the Bush administration proceeds in prosecuting potential corrupt practices in Central Asia involves a complex calculus, in which the United States must weigh its commitments to promoting democratization in the region, as well as national security considerations arising out of the ongoing anti-terrorism campaign.
"In Kazakhstan there are questions of accountability and transparency. Corruption is an insidious force that undermines movement toward the rule of law, and [the creation of] accountable democratic institutions and a market-based economy," Bialos said.
"The Bush administration has to strike a balance between the enforcement of a criminal statute and its broader concerns, such as its energy security policy, its interest in economic reform, and the need for a stronger security relationship with Kazakhstan in the war on terrorism," Bialos added.
Mark Berniker is a freelance journalist specializing in Eurasian affairs.