Gulnara Karimova, the daughter of Uzbekistan’s strongman leader Islam Karimov, has been making international headlines for years amid charges of massive bribery and corruption. But fresh evidence unearthed by an anti-corruption watchdog suggests her avarice reached mind-boggling scales as she vacuumed up cash from telecoms companies wanting a slice of Uzbekistan’s lucrative cellphone pie.
Karimova received over $1 billion in payments and shares from Scandinavian and Russian telecoms companies such as TeliaSonera, Telenor, MTS, and Alfa Telecom, the Organized Crime and Corruption Reporting Project (OCCRP) alleged in a report published March 21.
“Her audacious schemes may have cost the people of Uzbekistan money that could have paid for pensions or healthcare but instead went into banks, an offshore hedge fund and luxurious real estate around the world, including a castle in France and a penthouse in Hong Kong,” the OCCRP stated.
The watchdog was skeptical of the defense put forward by telecoms firms that they did not knowingly commit any wrongdoing: “While the international companies involved claim to have been innocent or unwilling dupes of her maneuvers, the blatant means by which Karimova allegedly operated made it virtually impossible for those involved not to realize they were giving in to extortion and bribery.”
Documents have come to light proving that the beneficiary of a $748,000 renovation funded by the U.S. military was not the state or people of Kyrgyzstan, as initially claimed by Kyrgyz and U.S. officials, but a private citizen who acquired the property under dubious circumstances.
The former state hospital, in the Bishkek suburb of Shopokov, was intended to be a “development center for battered women” and “a shelter for up to 55 women and their children,” according to U.S. military press materials distributed during a ribbon-cutting ceremony in 2010. The American airbase at Manas funded the renovations. The base commander and U.S. ambassador attended the event.
For a time, the impressively refurbished two-story building stood empty. Today it accommodates a private kindergarten that earns its owners roughly $47,000 per year, based on calculations using figures provided by the school’s employees.
The $748,000 grant was unusually large for Manas, accounting for one-third of the base’s humanitarian aid spending that year. Most of Manas’s development grants that year were for less than $20,000.
American officials appeared to believe at the time that the funds were being used to refurbish a state-owned building. In 2011, when the building stood empty, a Manas spokesperson told EurasiaNet.org that after refurbishment the building was supposed to remain Kyrgyz government property and said Manas was not responsible for monitoring program activity.
The implementing partner was Zamira Akbagysheva, the head of Kyrgyzstan’s Congress of Women.
Today, a sign on the gate outside the building declares “Authorized People Only.” With its sparkling paint-job, new windows, and bright-red roofing tiles, the building stands out in the neighborhood of dilapidated gray houses.
Kazakhstan’s public health officials in charge of the fight against HIV/AIDS and tuberculosis have conned a flagship global project out of over $5 million by using “smokescreen companies” to rig bids and overcharge for goods and services, the Global Fund to Fight AIDS, Tuberculosis and Malaria has said.
A probe by the Office of the Inspector General (OIG), the Switzerland-based fund’s oversight arm, “found evidence of systematic collusive, fraudulent, and corrupt practices by local vendors and other parties” involving a total of 76 contracts worth some $16.5 million, it said in a January 28 statement.
As a result of the contracts, awarded by two health centers under the remit of the Ministry of Health, the Global Fund was swindled out of at least $5.4 million through “systematic overpricing for printing, office equipment, health products and food parcels,” the OIG claimed.
There was no evidence that the goods – which included “condoms and a whole range of other goods and services for patients with HIV and/or tuberculosis” – had not been delivered, however.
The OIG is urging the Global Fund to take measures to recover at least $5.4 million, although it described that figure as a conservative estimate of what it had been conned out of by Kazakhstan’s Republican Center for Prophylactics and Control of AIDS (RCAIDS) and National Center of Tuberculosis Problems (NCTP).
Four individuals – called the “Ring Leaders” in the report and identified only as Alpha, Beta, Gamma, and Delta – were allegedly the main beneficiaries of the con, involving 17 companies which were part of an interlinked web colluding with each other. Other public healthcare officials were aware of the scheme, the OIG alleged.
Four of the five Central Asian states have failed to meet basic fiscal transparency standards, according to the U.S. State Department’s latest Annual Fiscal Transparency report. The study does not appear to affect whether a country receives U.S. government funding, however.
In addition to ascertaining whether countries meet State’s minimum standards (such as publishing receipts and expenditures in publicly available national budget documentation and bidding and contract information for natural resource extraction), the study assesses progress—or lack thereof.
Published by the Office of Monetary Affairs since 2008, the report only includes “those governments it anticipated would receive bilateral allocations of assistance” in fiscal year 2014. The latest version of the report was released January 14.
This year, Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan were all judged to have made “no significant progress” toward meeting minimum fiscal transparency standards, joining 35 other countries in that category. Overall, 50 fell below the minimum-standards threshold.
Kyrgyzstan, which has harnessed international assistance from USAID and other donors to improve public access to state budgets was judged to have met minimum transparency standards for the second year running.
In 2012, Tajikistan made significant progress toward the benchmark. It has slipped over the last two years, however.
Turkmenistan and Uzbekistan, which routinely rank at the bottom of Transparency International’s Corruption Perception Index, have never glittered in this report.
Last month, Kyrgyzstan’s Education Ministry announced two tenders worth almost $3 million to print more than 1 million textbooks. But it appears the ministry did not want just anyone to bid.
Someone involved in posting the tenders on the government’s procurement website included a couple of Latin-script vowels within Russian keywords (written in the Cyrillic script), making it impossible to search for the announcement.
For example, there is no difference to the naked eye between these two words: books and bооks. But the second word contains two Cyrillic o’s. That makes it impossible to find with an Internet search, which requires an exact match.
In the same way, the Education Ministry used the Latin letters a, e and o (which also appear in the Cyrillic alphabet) in its tender announcements, which are worth a total of $2.8 million. Reporters at Kloop.kg, who revealed the trick, recorded video evidence of how the announcements were hidden.
Anyone who didn’t know about the Latin letters would struggle to find the tender announcements. Anyone who did – someone colluding with a ministry official, for example – would have a massive advantage.
Kyrgyz officials didn’t think up this scheme on their own.
Back in 2012, Russian anti-corruption crusader Alexei Navalny, known for revealing fraud in state procurements there, described how officials “embezzle millions and billions” using this tactic.
A former mayor of Kyrgyzstan’s second-largest city faces criminal charges connected to his time in office, local media are reporting.
The state prosecutor issued an arrest warrant for Melisbek Myrzakmatov on abuse of office charges November 28. With less than a year before elections to the Kyrgyz legislature next fall, some will see the charges as politically motivated. Myrzakmatov, who has pledged to run for parliament, is believed to be abroad, although exactly where is the subject of speculation.
Myrzakmatov shot to infamy in June 2010 as Osh’s mayor during ethnic violence between Kyrgyz and Uzbeks that left hundreds dead. Described by the International Crisis Group as a “cruel and unyielding young nationalist,” Myrzakmatov, who remains very popular with many ethnic Kyrgyz in the country’s south, did little to prevent the violence; some believe he had a role in instigating it.
Myrzakmatov held his position for almost five years, from January 2009, before the violent change of government in Bishkek, to December 2013. For much of that time, Osh resembled a recalcitrant fiefdom, only nominally subordinate to authorities in Kyrgyzstan’s capital, Bishkek.
A former prime minister of Kazakhstan has been placed under house arrest on corruption charges. The rare move against such a high-ranking member of the political establishment is sure to set tongues wagging about the presidential succession.
Serik Akhmetov – who was premier until this April and defense minister until last month – has been charged with graft under an ongoing investigation that has seen high-profile arrests in Karaganda Region, the former PM’s political fiefdom, Tengri News reported, citing Kazakhstan’s anti-corruption agency.
Baurzhan Abdishev, a former regional governor and ex-mayor of the city of Karaganda, and Meyram Smagulov, another former mayor, were arrested this fall on corruption charges relating in part to the lucrative metallurgy industry based in the central region.
Akhmetov – who forged his career in the Karaganda metallurgy industry and the Soviet Communist Party in the 1970s and 1980s – was governor of Karaganda Region from 2009 to 2012, at a time when Abdishev was city mayor. This implies that the two are political allies, and commentators in Kazakhstan had already been linking the Karaganda corruption case with a likely move against Akhmetov.
He was appointed prime minister in 2012 and dismissed this April, amid hints that President Nursultan Nazarbayev was disappointed by his lackluster performance.
Yet Akhmetov was still appointed defense minister in that reshuffle, a post from which Nazarbayev abruptly fired him in October after just six months in the job.
Fresh allegations have emerged of bribery in Uzbekistan’s telecoms market involving another Nordic company and Gulnara Karimova, the daughter of President Islam Karimov.
A cellphone company partly owned by Norway’s Telenor is alleged to have paid some $25 million in kickbacks to acquire telecoms licenses in Uzbekistan, AFP reports, citing the Klassekampen daily.
The funds were reportedly transferred from Amsterdam-headquartered Vimpelcom, the operator of the Beeline brand in Uzbekistan, to the infamous Takilant Limited company, which is at the heart of two separate graft probes in Europe. Takilant is involved in a money-laundering probe in Switzerland (in which Karimova is a suspect), and also a bribery probe in Sweden involving another Nordic telecoms giant, TeliaSonera.
“Bank statements document how the money was transferred from a previously unknown company in the British Virgin Islands as Vimpelcom purchased licenses to the mobile market in the former Soviet state,” AFP quoted Klassekampen as saying.
Telenor responded that it has “zero tolerance for corruption, both when it comes to our own operations and also to the companies that we are part owners in.”
“We are a minority shareholder in Vimpelcom, so it’s up to Vimpelcom to take responsibility for answering any questions that relate to their operations,” Telenor communications head Glenn Mandelid told AFP.
Vimpelcom, which is 33 percent owned by Telenor, told EurasiaNet.org by email that there is nothing new in the information that has emerged.
A BMW 7 Series sedan. Will Kazakhstan's Olympic officials be using official money to buy themselves any of these? It's happened before. (BMW.ru)
The question on some minds in Almaty is not if Kazakhstan’s financial hub will win the right to host the 2022 Winter Olympics, but rather, if Almaty does, who will steal the public funds designated for the Games. After all, few in Almaty were shocked to learn this week that the last time they hosted a big sporting bash, millions of dollars disappeared.
A judge in Almaty has sentenced Aidar Musin, a member of the 2011 Asian Winter Games organizing committee, to over five years in jail for embezzling more than $3 million from the state’s budget for those games, reports TengriNews.
Kazakhstan's financial police had alleged that a company with connections to Musin won a 1.4 billion tenge ($7.3 million) contract to provide a telecommunications system and equipment for a ski-jumping complex in Almaty. More than 600 million tenge ($3.3 million) from that contract disappeared, with Musin using some of this money to buy himself a 2009 model BMW 750 sedan and a 2011 model Mercedes Benz E-250 sedan, the Almaty City Court ruled.
Almaty is one of two finalists in the competition to host the 2022 Winter Olympics. Only Beijing is also still in the running after a gaggle of European cities pulled out, citing low public support for the billions necessary to host the spectacle.
Kazakh officials say they are keen to keep costs for the 2022 Winter Olympics under control by attracting sponsors and advertisers to cover most expenses. The budget is currently around $3.7 billion. But as with any major project in Kazakhstan, it is hard to avoid questions about corruption.
French investigators are probing suspected kickbacks paid over a lucrative helicopter deal with Kazakhstan, Le Monde has revealed.
The report emerged the day before President Nursultan Nazarbayev heads to Brussels to cement Kazakhstan-European Union ties. Embarrassingly, it alleges the Kazakh president used a €2 billion contract with Marseille-based Eurocopter (since renamed Airbus Helicopter) to pressure Belgium to drop bribery charges against three Kazakhstani oligarchs.
The investigation into the Eurocopter deal (signed in 2010 when Nazarbayev was welcomed to France by Nicolas Sarkozy, then French president) on suspicion of money-laundering, corrupting public officials and receiving stolen goods began in 2012 and has been conducted in the utmost secrecy, Le Monde reported.
Last month two former Sarkozy associates who held top jobs in his administration were arrested on suspicion of involvement in paying kickbacks over the contract, the newspaper said, naming them as Jean-Francois Etienne des Rosaies, a former adviser to Sarkozy, and Nathalie Gonzalez-Prado, a former senior official at the Elysee palace.
The probe was sparked by the appearance of “suspicious funds” (more than €300,000) in the account of Etienne des Rosaies, the report said, adding that two unnamed “intermediaries” and a lawyer had been indicted.
Sarkozy is also “suspected of having put pressure in 2011 on the Belgian Senate,” at Nazarbayev’s request, over a bribery and money-laundering probe involving three Kazakhstani oligarchs as a condition for the helicopter deal going ahead, Le Monde claimed. The report did not name the oligarchs.