Kazakhstan has successfully argued in a US appeals court that it can file suit against a former top official — an avowed foe of the government — in California for compensation over alleged acts of corruption that occurred more than a decade ago.
The Justice Ministry said in a statement on March 31 that Almaty city hall will now be able to proceed in seeking recourse for what it says was Viktor Khrapunov’s systematic looting of state assets. The ministry argues that by using those funds to invest in properties in the United States, Khrapunov has left himself open to anti-corruption legislation there.
“This ruling is the result of consistent work against corruption. Now, the lawsuit filed by Almaty against Khrapunov will be considered on its merits in the state of California,” the ministry said.
The verdict from the United States Court of Appeal for the Ninth Circuit on March 30 overturns an earlier ruling by US District Court for the Central District of California.
Khrapunov was a high-profile government official in the 1990s. In 1995, he headed the Energy and Coal Industry Ministry, and then from 1997 to 2004, he served as mayor of Almaty. After that he was named governor of the East Kazakhstan region.
In 2007, he was appointed Emergency Services Ministry, but resigned his post some 10 months later. A few days after stepping down, he reputedly hopped onto a private jet and flew to Switzerland; to treat some unspecified health condition, according to Khrapunov’s own website.
Khrapunov is object of more than 20 criminal investigations in his homeland.
Rayimbek Matrayimov, the deputy director of the State Customs Service, shown in a screen grab of the Radio Azattyk's investigative report.
An in-depth investigative report by RFE/RL’s Kyrgyz service into the suspicious wealth of a high-ranking customs official is a stark reminder of the hardiness of old habits.
While the investigation by the broadcaster, which is known locally as Radio Azattyk, has set tongues wagging, it is far from clear so far if it will have any repercussions for the people involved.
The video report focuses on Rayimbek Matrayimov, the deputy director of the State Customs Service, who is revealed in the report to be the owner, among other things, of a luxurious villa in Osh.
Azattyk used a simple but ingenious approach in trying to work out the yawning discrepancy between the amount of goods apparently coming into the country and the quantity of import tariffs paid into the state budget.
Doing some back of a napkin math, Azattyk reasoned that since around 20,000 trucks come into Kyrgyzstan from China every year, and each truck carries roughly 25 tons of goods, and import duties are levied at 100 som ($1.5) per kilo, the income accruing annually to the state should be more than 49 billion som ($700 million). And yet the amount of import tariff revenue being declared is closer to 30 billion som, which raises questions about where that money might be going, Azattyk said.
Then there is another curious set of figures. Chinese customs authorities have said that in 2015, around $4.3 billion of goods were exported to Kyrgyzstan. But their Kyrgyz counterparts, meanwhile, have offered the much smaller figure of $920 million for that same period.
Olim Sulaimanov, an Uzbek businessman who came to prominence last year after posting a video online alleging he had been harassed for bribes by tax officials. (Olim Sulaimanov Facebook account)
Things are going from bad to worse for Uzbekistan’s anticorruption whistleblower with a court ordering his confinement to a pretrial detention facility pending criminal hearings into corruption.
Olim Sulaimanov, who came to prominence last year after posting a video online alleging he had been harassed for bribes by tax officials, appeared in Mirzo Ulugbek district court in Tashkent on February 15 following a surprise summons from investigators earlier this month.
Sulaimanov had said hearings were due to take place last week, but that his lawyer, Amriddin Abdullayev, could not be reached, possibly as a result of pressure from the authorities. The businessman arrived in court with Abdullayev and his 17-year old son Egamberdy Sulaimanov in the middle of the afternoon. Two representatives from the US Embassy also came to the court building but were denied entry to the hearing.
The judge made no ruling during the preliminary hearing, postponing arguments until February 20, but nonetheless appears to have ordered that Sulaimanov be placed in custody at a Tashkent city police precinct holding facility, Egamberdy Sulaimanov told EurasiaNet.org.
“I was not allowed to enter the courtroom and neither were employees of the US Embassy. When the hearing ended, only the lawyer, Abdullayev, emerged and he told me that my father had been temporarily detained and was being transferred to the Tashkent city police pretrial detention facility,” the son said.
Kazakhstan’s National Security Committee, or KNB, is set to receive more powers.
Under a government-initiated draft bill now under consideration, the KNB could be authorized to investigate suspected cases of corruption by certain government departments, including the anti-corruption services and the military.
First deputy Prosecutor General Johann Merkel on February 15 described this provision as laying the ground for greater balance among investigative organs, although the KNB appear to be gaining the upper hand in this arrangement.
The evolution of the KNB into the battering ram of the government’s stated goal to stamp out corruption has been taking place for some weeks already. Placing the anticorruption agency under the KNB’s watch, therefore, represents a formal confirmation of an already existing situation.
Another contentious section of the same legislative package envisions a stiff increase in fines for people found guilty of harassing — even if not physically molesting — law enforcement officers — up to 11 million tenge ($34,000).
Even the speaker of the Majlis, the lower house of parliament, Nurlan Nigmatulin, was moved to describe the proposed fine as “mind-numbing” and suggested that it perhaps be revised downward.
Despite this unusual grumbling, MPs waved the bill through its first reading, thereby readily confirming the reputation of the Majlis as a rubber-stamping adjunct of the government. A review on the size of the fines is expected during the second reading.
Uzbek entrepreneur Olim Sulaimanov speaking in a Facebook video address posted on February 11 in which he speaks about his latest run-ins with prosecutors. (Source: Facebook screenshot)
An entrepreneur in Uzbekistan who made a splash last year after appearing on national television to complain about the excesses of corrupt officials has himself now been targeted with fresh criminal investigations.
Back in November, Olim Sulaimanov provoked a sensation with his appearance on the TV show Business Club, where he explained how employees with a branch of the anti-finance crime department of the Prosecutor General’s Office in Tashkent had tried to extort money from him. The businessman named names and figures in his description of how tax officials were targeting his company.
Now, investigators are getting their own back. Earlier this month, Sulaimanov was summoned to appear in Mirzo Ulugbek district court in Tashkent to hear a case filed against him by Tashkent prosecutors on charges of fraud and slander.
As before, Sulaimanov has made full use of social media to document his situation.
“I was stunned when on February 1 I got a phone call from a judge called Kamolov and he summoned me to court the next day as an accused party. Actually, the Tashkent city court is currently considering my appeal [in an unrelated case] and the return of 203 million sum ($57,000) confiscated from my accounts. It turns out that I am involved in two cases at the same time,” he told EurasiaNet.org.
The entrepreneur suggested that some strange developments indicate the authorities are trying to apply pressure, as is customary. Sulaimanov said he did not attend a hearing eventually set for February 8 as his lawyer, Amriddin Abdullayev, informed him he was outside the city and therefore unable to come to court. Sulaimanov hinted that the lawyer had come under pressure.
Anti-corruption investigators have reportedly detained recently dismissed National Economy Minister Kuandyk Bishimbayev on suspicion of taking bribes.
Tengri news website on January 10 cited the Agency for Civil Service Affairs and Anti-Corruption as saying Bishimbayev has been taken into custody and is being held at an Interior Ministry pre-trial facility in Astana pending investigations.
Bishimbayev was fired by presidential decree on December 28 and replaced by Timur Suleimenov.
President Nursultan Nazarbayev later hinted during a government meeting on December 30 that personnel changes at the National Economy Ministry stemmed from ongoing investigations into Bishimbayev and his dealings with the state-owned Baiterek holding company.
Dark clouds have for a while been gathering over Baiterek, or more specifically its daughter company Baiterek Development, which has been under investigation since mid-November.
On November 21, a number of executives at the company were arrested on suspicion of taking bribes from lobbyists for companies seeking contracts as part of the state’s ambitious Nurly Zhol infrastructure development program. According to the Kazakhstan edition of Forbes magazine, the amount of bribes taken amounted to 288 million tenge, around $900,000.
Just a few days after the former head of the tax service in Kazakhstan was appointed to serve as deputy to the chief of the security services, another senior tax official has been handed a top job in the defense ministry.
The presidential administration announced on December 1 that Abylkair Skakov would be moving from his post as head of the tax inspectorate in the capital, Astana, to become deputy defense minister.
Both appointments appear to stem from the government’s ongoing efforts to reduce graft and optimize financial efficiency, both key priorities as the economy faces the prospect of indefinite stagnation amid depressed prices for oil.
When Daulet Yergozhin was named as the new deputy head of National Security Committee, or KNB, even his colleagues were candid about the sense of the move.
“Daulet Yergozhin has shown himself to be an effective manager everywhere he has worked. He is a very upstanding person. I hope that [he] will also be effective in the fight against corruption, which is the main threat to our national security,” former deputy tourism and sports minister Bahytzhan Shengelbayev said on his Facebook account.
It is customary for top officials in the former Soviet space to speak notionally about corruption posing a security threat, but this is as concerted an effort to address the issue as the region has seen for a long time.
The twin KNB and Defense Ministry reshuffles look like a pincer movement on the armed forces. The KNB has not been heavily invested in investigating financial crime in recent years, and has focused more on antiterrorism or, in some cases, going after prominent figures in the opposition.
Uzbekistan’s state-run Channel One aired a sensational segment during a show called Business Club on November 5 that featured the frustrated observations of an indignant entrepreneur.
In a unusual televised outburst, Olim Sulaimanov explained how employees with a branch of the anti-finance crime department of the Prosecutor General’s Office in Tashkent had tried to extort money from him. Sulaimanov named names and figures in his description of how tax officials have been targeting his company.
“An employee with the department, Dilshod Hazratkulov, intimidates businessmen with money on their [bank] account and extorts money from them,” Sulaimanov said.
In Sulaimanov’s telling, Hazratkulov dropped in on his office in April and demanded that he transfer 48 million sum (around $7,500 at the current black market rate) onto the account of some other unknown company. The businessman said that when he refused, he had his assets frozen. Sulaimanov said that as a result he lost a $1 million contract to deliver fruit and vegetables to Russia.
The appearance on Business Club came about after Sulaimanov posted a video on YouTube directly appealing to acting president Shavkat Mirziyoyev for assistance. In the video, Sulaimanov asks that he be allowed to make his case during a television broadcast.
Sulaimanov, 61, founded and runs a company called Atlant Business Optima, which has been in operation since 2011 and deals primarily in exporting fruit and vegetables.
Now, whether this sequence of events is for real or otherwise is up for debate -- it is always possible it was a bit of theater for the viewers -- but what is clear is that Mirziyoyev is endeavoring to demonstrate that the rules of the game have changed for Uzbekistan’s long-suffering business community.
About 1,000 members of Uzbekistan’s business community assembled late last week at a Tashkent conference hall to parley with the Interior Ministry, tax officials and the General Prosecutor’s Office about how to protect themselves from the threat of corruption.
News of the event, which took place on October 27, was broadcast on the state evening news and several internet sites and newspapers.
The spur for dialogue came in the form of a decree signed by acting President Shavkat Mirziyoyev earlier in the month intended to ensure “the rapid development of business, protection of private property and the qualitative improvement of the business climate.” Improving life for private enterprise appears to be one of the many promises of reset being dangled before Uzbeks since the death of the late President Islam Karimov.
While television and state newspaper reports about the conference were skimpy on the details, online outlets delved a little further. For example, Gazeta.uz cited the chairman of the State Tax Committee, Botir Parpiyev, as admitting to the proliferation of unauthorized inspections on companies and that these were harming the prospects of business development in the country. A starling admission by anybody’s standards.
“According to [State Tax Committee] data, an average of about 4,000 unscheduled inspections were carried out in Uzbekistan [NB: no timeframe provided],” Gazeta.uz reported, citing Parpiyev. “More than 1,500 case files were sent for investigation.”
Parpiyev carried on to say that 200 companies are closing yearly as a result of these unannounced inspections, causing damages worth several million dollars in total.
“This has created major inconveniences and halted the operations of companies and the delay of salary payment to employees,” Parpiyev said.
The son of Tajikistan’s leader, a 29-year old sometimes touted as a possible successor to the presidency, has announced he has completed a sociological survey on corruption.
As head of the state anticorruption agency, Rustam Emomali was ideally positioned to undertake the task, although the news is likely to have provoked raised eyebrows all the same.
As it happens, many in Tajikistan firmly believe it is the ruling family and their associates that are largely to blame for the rampant bribery, although no comprehensive and independent polling has been done to measure those moods. Tajikistan ranked joint 136th out 165 countries in Transparency International’s latest Corruption Perceptions Index — the same as Nigeria and 17 position below Russia.
Emomali spoke about the research while providing an update on October 27 to his father, President Emomali Rahmon, on his agency’s effort to combat graft over the past year. The aim of the study was to understand the exact causes of corruption and determine public attitudes toward the problem by putting questions to around 88,000 residents, Emomali said.
Ozodagon website cited Emomali as saying that respondents queried stated they most often confronted corruption in the healthcare and education sectors and while securing services at the birth and marriages registry office.
More than half the people that participated in the survey said some of the most corrupt state organizations in Tajikistan also include the prosecutor’s office, the customs service, national security bodies, the judiciary, and the Interior Ministry.